Riot Games Sued Over FTX Partnership With LCS

A new lawsuit filed in a California federal court alleges that Riot Games and its League of Legends Championship Series (LCS) is complicit in promoting fraud through its partnership with now bankrupt and defunct cryptocurrency exchange FTX. Riot Games inked a partnership deal with the crypto exchange in 2021. 

The lawsuit alleges that Riot Games and its the North American League of Legends league LCS “contributed to the collapse” of FTX Trading LTD, FTX US, and Alameda Research (FTX Group), by “aiding and abetting and/or actively participating in the FTX Group’s massive, multi-billion dollar global fraud,” by “promoting, offering, or selling unregistered securities such as FTX’s yield-bearing accounts and FTX’s native cryptocurrency token.” 

The plaintiffs in the case allege that Riot and LCS violated securities fraud laws, violated unfair competition and deceptive practices laws in multiple jurisdictions, and engaged in civil conspiracy. Plaintiffs note in court documents that they filed the class action lawsuit because:

“Unfortunately for Riot Games and the LCS, under binding law, anyone that mass promotes products FTX’s can be sued for any and all resulting damages. This law was updated for today’s technology so that promoters like Riot Games and the LCS can be held liable under securities laws for using the Internet and social media for mass solicitations of crypto-related securities, whether for their own or the securities issuer (FTX Group)’s gain. The law now recognizes that the Internet, social media, and other new platforms have given promoters an incredible new outlet to aid and participate in selling fraudulent investments to investors across the globe.” 

The named plaintiffs in the case are Edwin Garrison, Brandon Orr, Leandro Cabo, Ryan Henderson, Michael Livieratos, Alexander Chernyavsky, Greg Podalsky, Vijeth Shetty, Chukwudozie Ezeokoli, Michael Norris, Shengyun Huang, Vitor Vozza, Kyle Rupprecht, and Sunil Kavuri, on “behalf of themselves and all others.” 

The 158-page lawsuit filed on March 7, seeks to be certified as a class action by the court and demands a jury trial. Plaintiffs are seeking “direct and compensatory damages,” as well as “restitution and disgorgement of revenues” as well as “statutory, punitive, and multiple damages” as appropriate, legal fees, and more.

The partnership with FTX, which was reportedly worth $40M USD (according to some reports) over a seven-year period, saw the cryptocurrency exchange serve as a presenting partner of the LCS, and sponsored “Most Improved Player Award” and “FTX Gold” segments across all LCS matches during the season.  FTX also engaged in giveaways with fans on social media during live broadcasts.

Riot, like many other partners of FTX, only received a small portion of the deal’s total value, though it is unclear just how much money FTX did ultimately pay the company before it collapsed at the end of 2022. The Bahamas-based cryptocurrency exchange officially filed for bankruptcy in November 2022. 

Editor’s note: We inadvertently called the “plaintiffs” the “defendants” in a previous iteration of this story.