FTX is being sued by Riot Games for alleged "reputational harm"

In an attempt to sever its relationship with the cryptocurrency exchange, Riot Games is suing FTX in a bankruptcy court in the United States. The two businesses had previously agreed to a seven-year contract for FTX to serve as the League of Legends Championship Series’ official cryptocurrency sponsor (LCS). However, according to paperwork Riot Games submitted to the bankruptcy court, FTX filed for bankruptcy earlier this year and has only given Riot Games half of the $12.5 million USD in payments that were agreed upon for the 2022 calendar year. FTX is being sued by Riot Games for alleged “reputational harm”

Riot Games has not yet received payment from FTX for the calendar year 2022

Additionally, FTX and TSM, an esports organisation, were partners. As part of a 10-year agreement, TSM and FTX formed a partnership in which FTX invested $210 million USD in the esports squad. In a formal statement addressing FTX’s bankruptcy, TSM said that, aside from the information that is known to the public, it does not know what caused the bankruptcy of its investor. The first payment FTX owes to Riot Games for the upcoming calendar year is due on January 3, 2023, which is just around the horizon. If all went according to plan, Riot and FTX would work together through the 2018 LCS season. Reporter Molly White estimates that Riot Games will get a total compensation of $96 million USD.

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“There is simply no way for FTX to undo the reputational injury already done to Riot as a result of the extremely public dishonour created by the catastrophe preceding FTX’s bankruptcy filing,” Riot claimed in the court documents. The harm done to Riot as a result of FTX’s bankruptcy cannot be undone in the past.

The founder of FTX, Sam Bankman-Fried, was taken into custody earlier this week in The Bahamas. He was charged with playing League of Legends in front of clients. In the court documents, Riot Games stated that FTX and Sam-Bankman Fried are “inextricably attached” to the company because of their shared love of League of Legends. The case filed by Riot Games against FTX will have its first hearing on January 11, 2023.

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