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The Esports Advocate
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The lawsuit, filed on March 7, 2024, claims Riot Games aided and abetted fraud through its partnership with the bankrupt cryptocurrency exchange FTX.
A class-action lawsuit filed in a California federal court alleges that Riot Games and its League of Legends Championship Series (LCS) are complicit in promoting fraud through a former partnership with the now-defunct cryptocurrency exchange FTX. The plaintiffs contend that by entering into a multi-year sponsorship deal in 2021, Riot Games aided and abetted the FTX Group’s multi-billion dollar fraud. The legal action asserts that the developer and its league promoted unregistered securities, including yield-bearing accounts and native cryptocurrency tokens, to a global audience via social media and live broadcast integrations.
The lawsuit, filed on March 7, 2024, seeks class certification and a jury trial to address claims of securities fraud, unfair competition, and civil conspiracy. Plaintiffs are pursuing various forms of relief, including direct and compensatory damages, restitution, and the disgorgement of revenues generated from the partnership. The legal argument rests on the premise that modern digital platforms and mass-solicitation strategies render promoters liable for damages resulting from the fraudulent investment products they endorse.
The underlying partnership, which was reportedly valued at approximately $40 million over seven years, integrated the FTX brand into the LCS through presenting sponsorships, award segments, and fan-facing giveaways. While the extent of the financial compensation received by Riot Games prior to the exchange’s bankruptcy in November 2022 remains unclear, the litigation highlights the growing legal risks for esports entities that engage in high-profile marketing agreements with volatile financial services firms. The case represents a significant development in the intersection of professional gaming, digital asset regulation, and corporate accountability.
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