Investors Claim Riot Games, LCS Aided Multi-Billion Dollar Cryptocurrency Fraud Through FTX Partnership

On Thursday, March 7, 2024, Riot Games, Inc. and the North American League of Legends Championship Series LLC were sued in a proposed class action lawsuit relating to the collapse of cryptocurrency exchange FTX.

The proposed class action was filed in the United States District Court for the Central District of California by Edwin Garrison and 13 other individual investors on behalf of all persons and entities residing in the United States who lost money from transactions on FTX. The lawsuit alleges that Riot Games and LCS are responsible for the damages incurred by investors from contributing to and aiding FTX’s multi-billion dollar fraud scheme.

Specifically, the complaint alleges that Riot Games and LCS actively promoted FTX on social media and esports events over a seven-year partnership, helping push FTX’s unregistered securities like yield-bearing accounts and FTX Token to an unprecedented scale. By promoting FTX so aggressively, the lawsuit claims, Riot Games and LCS enabled FTX to defraud millions of investors around the world out of billions of dollars.

The complaint alleges that FTX’s business model functioned as an illegal Ponzi scheme, using new investor deposits to pay returns to earlier investors. It asserts that FTX offered and sold unregistered securities like FTX Token (FTT) and yield-bearing accounts (YBAs) in violation of federal securities laws. As FTX collapsed in November 2022 over $30 billion in value disappeared overnight according to bankruptcy filings.

Riot Games and LCS have not yet responded to the allegations in the complaint. If certified as a class action, the lawsuit could potentially include hundreds of thousands of alleged victims around the world who traded on FTX during the proposed class period. The proposed class is seeking damages in excess of $11 billion for investment losses.

Please contact BlockTribune for access to a copy of this filing.