As early as August 2021, Riot Games – the developers of League of Legends– signed a tens-of-million-dollar sponsorship deal with cryptocurrency exchange FTX. You know, the exchange, which is now bankrupt, whose founder has been arrested and faces serious fraud and money laundering allegations.
When Web3 runs just great Molly White reports, the deal was expected to run for seven years and FTX would make “significant payments” to Riot, starting at $12.5 million for calendar year 2022 (and escalating to $12,875 for 2023 and so on). So far, only $6.25 million of that total has been paid for 2022, and there’s almost no chance Riot will ever see another dime. As a result, the company has filed a lawsuit in the Delaware bankruptcy court to void the remainder of the sponsorship deal.
From a purely business point of view, this is perfectly understandable. As Riot points out in their filing, FTX has filed for bankruptcy, which should send the whole deal straight into the bin, no questions asked. Just in case anyone does However, Riot has raised questions, adding, “There is simply no way for FTX to heal the reputational damage that has already been done to Riot as a result of the high-profile disrepute created by the debacle leading up to FTX’s bankruptcy filing. FTX cannot turn back the clock and undo the damage done to Riot after it collapsed.”
Basically, Riot argues that FTX’s reputation has been so thoroughly ruined in recent weeks that it hurts Riot to be even remotely associated with the failed exchange. To avoid the whole thing, Riot throws in the FTX’s Disgraced former boss Sam Bankman-Fried became notorious for playing Riot’s League of Legends at business meetings:
Before and during this media firestorm, Riot’s image and reputation with its customer base remained inextricably linked to FTX through its former CEO, Mr. Bankman-Fried. Media and Twitter commentators circulated images of Mr. Bankman-Fried playing League of Legends – the game by Riot Games – at the same time FTX crashed. Mr. BankmanFried is famous for his affinity for the game. He is known among investors for playing League of Legends at meetings. He admitted on Twitter that he “played a lot more [League of Legends] than you would expect from someone who routinely balances sleep versus work.” Even Mr. Bankman-Fried’s League of Legends ranking was the subject of online commentary with public figures, Alexandria Ocasio-Cortez and Elon Musk.
Even back when that deal was first signed in August 2021, it was agonizingly clear what the endgame would be for this whole scam, whether it was video game developers or NBA teams or overzealous celebs.
You’d think Riot would know, especially now in the middle of it Allbut another part of the filing argues that the FTX deal must end because it prevents them from moving forward “Commercializing crypto exchange sponsorship category…currently owned by FTX”. Fool me once, shame on you, etc.
