League of Legends developer Riot Games wants out of its estimated $96 million deal with the defunct cryptocurrency company FTX, citing irreparable “reputational harm” in a court filing attached to FTX’s ongoing bankruptcy case.
Per the filing, via crypto researcher Molly White, FTX’s public downfall has negatively impacted Riot Games both reputationally and financially — both because of this deal, which gave FTX the title of League of Legends’ League Championship Series, and because of FTX CEO Sam Bankman-Fried’s personal association with League of Legends. It’s a separate deal than the $210 million sponsorship signed with esports team TSM. FTX’s TSM deal, which was to be paid out over 10 years, according to The New York Times, was “suspended” in November.
FTX’s collapse and Bankman-Fried’s subsequent arrest — as well as the eight charges of fraud and conspiracy — caused “significant” monetary and reputation damage, Riot Games says. Riot Games’ FTX deal was its biggest sponsorship agreement for any of its esports leagues, it said.
“Media outlets and Twitter commentators splashed images of Mr. Bankman-Fried playing League of Legends — Riot Games’ game — at the same time that FTX was crashing,” Riot Games lawyers said in the filing.
Bankman-Fried has been open about his love of League of Legends: He tweeted last year that he’s infamous for “playing League of Legends while on phone calls,” saying he plays a whole lot more than people would “expect from someone who routinely trades off sleep vs work.” He continued: “Some people drink too much; some people gamble. I play League.” The FTX deal only amplifies that association, according to the lawsuit.
This proclivity to League of Legends reportedly included business meetings, too. Shortly before FTX’s collapse, investment firm Sequoia Capital published a profile of Bankman-Fried that claimed the founder played League of Legends during an investor meeting that eventually turned into a $200 million investment. (Days after Sequoia’s profile, and after the public FTX collapse, the company took its profile down.)
FTX also reportedly owes Riot Games a substantial amount of money: $6.5 million by Riot Games’ count. FTX was expected to pay the rest over six years, per the lawsuit. In January, FTX was expected to start quarterly payments over the year, starting with $3.2 million, adding up to $12.9 million in 2023. Riot Games, however, says FTX has “provided no assurance of its willingness or indeed ability to pay.”
The other problem, Riot says, is that the agreement prevents the League of Legends developer to get another crypto sponsor for its next LCS season.
As FTX’s bankruptcy case continues through the courts, Bankman-Friend is expected to appear in a Bahamas court on Monday, according to Reuters. Reuters reports that Bankman-Fried will agree to extradition to the United States where he’s been charged with fraud and money laundering.