Riot Games is officially motioning to end its partnership with cryptocurrency exchange FTX. Riot sent in a series of court documents yesterday to the United States Bankruptcy Court, calling for a termination of their seven-year partnership with FTX just one year into their agreement.
“There is simply no way for FTX to cure the reputational harm already caused to Riot as a result of the highly public disrepute wrought by the debacle preceding FTX’s bankruptcy filing,” Riot says in the court documents. “FTX cannot turn back the clock and undo the damage inflicted on Riot in the wake of its collapse.”
Riot and FTX joined forces last summer when the League of Legends developer brought FTX in as the official cryptocurrency sponsor of the LCS, the company’s most lucrative North American esports league. The writing was on the wall for their deal to go up in smoke when FTX filed for bankruptcy earlier this year.
According to the motion, FTX has paid Riot half of what it owes them for the 2022 calendar year. FTX owes Riot $12,500,000 this year and has paid exactly half of that amount. Next year, FTX will owe Riot even more money as per their agreement, with the first payment due on Jan. 3, 2023.
The partnership between Riot and FTX was set to last through the 2028 season, with payments to Riot increasing in value each year. In total, the partnership was on pace to net Riot an approximate total of $96 million, according to a statement unearthed by independent cryptocurrency writer and reporter Molly White.
Earlier this week, FTX founder Sam Bankman-Fried was arrested in The Bahamas. In its motion, Riot argues that the attachment of the company, the LCS, and League of Legends to Bankman-Fried negatively affects all of Riot’s brands. The FTX founder is described in the motion as “reckless and juvenile,” especially when allegations of him playing League games in the midst of FTX’s collapse came to light several weeks ago.
“The reputational harm inflicted upon Riot cannot be undone,” Riot says in the motion. “FTX cannot go back in time and put in place corporate controls for the safekeeping of customer funds that have in the public eye now been absconded.”
Riot claimed that its image was “inextricably linked” to FTX and Bankman-Fried, especially through the founder’s love for League of Legends.
FTX also sponsored a team directly in the LCS, TSM. Although TSM wasn’t allowed to use the FTX branding in League of Legends events, as per Riot’s rules and regulations on banned sponsorships (drugs, alcohol, and pornography sponsorships also fall into the same category as crypto partnerships for teams), TSM did so across the other esports it ventured in. TSM and FTX cut ties with each other on Nov. 16, just 17 months into their 10-year deal.
In Riot’s case, a hearing date for its motion to end the agreement with FTX has been set for Jan. 11, 2023.
