Nowadays, it appears that anything remotely close to anything crypto-related is bound to face some issues. Riot Games recently filed a motion to cut ties with the FTX, a cryptocurrency exchange firm, as reported by Molly White, a crypto researcher and critic on Twitter.
If you’re not aware, the League of Legends creator Riot Games originally entered a deal with FTX in relation to their esports sector, the League of Legends Championship Series (LCS).
The seven-year contract required FTX to fund LCS in exchange for Riot Games’ promotion of FTX’s brand. According to White on Twitter, FTX owed Riot Games $12.5 million but has so far managed to pay only $6.25 million, which is exactly half of the owed sum. The remaining balance for the calendar year 2022 is $6.25 million.
Riot Games just filed a motion in the FTX bankruptcy case to end their deal, pertaining to the League of Legends Championship series.
FTX still owes $6.25M (about half the payment) for 2022, and will owe $12.875M for 2023. Per the agreement, the payments escalate through 2028.
— Molly White (@molly0xFFF) December 17, 2022
And in 2023, FTX was supposed to pay Riot $12,875,000, which now seems highly unlikely given the recent FTX bankruptcy case. According to the documents shared by White on Twitter, the payments would continue to increase incrementally until 2028.
Riot Games isn’t directly filing a lawsuit against the cryptocurrency exchange firm but instead a motion in relation to the FTX bankruptcy case. In the motion, Riot Games expresses their concern about the balance left unpaid by FTX as the sponsor of LCS. And understandably, Riot also mentions that they do not find it realistic to expect FTX to be able to cover the rest of the payment.
While Riot Games isn’t confident about the future performance of FTX, they are simply looking to sever ties with the firm. Even if FTX doesn’t accept Riot Games’ motion to cut ties and fight back, Riot Games is looking for an alternative: a relief from ‘Automatic Stay.’
‘Automatic Stay’ is a legal term that means that the creditor cannot take any action against the debtor, despite not being able to pay what is owed to the creditor. If the FTX cryptocurrency exchange firm cannot pay what they owe Riot Games, the court may be able to cut their ties without any further action.
Riot Games has also expressed that the FTX bankruptcy filing and the recent arrest of the founder Sam Bankman-Fried have stirred up a lot of controversies. This has resulted in Riot Games receiving a major public backlash and a bad reputation.
Both parties can do their best to devise solutions that may serve them positively. However, now only the court can decide what conclusive result ensues as part of this legal battle.
