The Washington Post
23rd March 2022 – (Washington) A new lawsuit filed by G2 Esports in the Los Angeles County Superior Court on 16th March accuses the blockchain technology company Bondly of botching a deal for the development and sale of non-fungible tokens, or NFTs, based on the esports brand’s intellectual property. In the filing, G2 alleges that Bondly misled leadership at the gaming and entertainment company about its capabilities and failed to meet deadlines for deliverables — including payments to G2 — resulting in damages of over $5,250,000.
According to copies of two contracts attached as exhibits to the filing, G2 and Bondly entered into a two-year exclusive partnership on June 2, 2021. As a participant in that partnership, Bondly was tasked with developing and acting as the sales agent for G2′s NFTs. The company was also on the hook for a series of fees: an annual rights fee of $2 million, as well as an advance guarantee of $1.25 million, paid out in instalments that Bondly could recoup in the course of NFT sales.
The arrangement in the contracts states esports brand granted Bondly access to its intellectual property — images, video and audio relating to the company and its esports teams — and planned to promote the company as an “Official Partner of G2 Esports.”
Neither G2, its legal representatives nor Bondly responded to The Washington Post’s requests for comment.
G2 alleges in the lawsuit that shortly after the first rights fee invoice was sent, a representative for Bondly wrote to G2 that the company was “past the point of being able to successfully deliver an NFT program.” In subsequent communications, G2 alleges the two parties could not come to an agreement over who was in charge of responsibilities outlined in the contract, and that Bondly sought to pause the agreement — a move that G2 rejected. According to the claims in the filing, several weeks later Bondly attempted to terminate the agreement between the two companies, citing G2′s unwillingness to work toward a mutually agreed upon solution.
In the filing, G2 alleges its brand’s reach and cachet were a huge draw for Bondly.
“Bondly and its agents knew that their representations were false when they made them, or made the representations recklessly and without regard to their truth,” the filing reads. “They knew they could not perform, but cunningly waited until G2 had publicly announced its partnership with Bondly to its millions of fans to reap the benefits of publicity through the highly valuable G2 brand.”
On its website, Bondly describes itself as a company that “[executes] every step of the process to bring authenticated digital-first goods to the market in music, entertainment, gaming and collectibles with a suite of products and services designed to support the entire blockchain ecosystem.” The company’s website also references past NFT partnerships with singer-songwriter Lewis Capaldi and Internet personality Logan Paul.
Over the past few years, a number of esports organisations have gotten involved in cryptocurrency, including Sentinels, Ninjas in Pyjamas, FaZe Clan and 100 Thieves, among others.
“It’s easy to hate on NFTs due to previous catastrophic cash grab attempts from weasels,” tweeted Carlos “ocelote” Rodríguez, founder and CEO of G2 on June 3, 2021, when the company’s partnership with Bondly was first announced. “We are doing this for the right reasons and will be around for decades to come.”