G2 Esports has filed a lawsuit in the Los Angeles County Superior Court that accuses Bondly, a blockchain technology company, of mishandling their deal for the creation and sale of G2 non-fungible tokens that fans could purchase, according to a report by The Washington Post.
The court filing fist found by the Post said that Bondly misled G2’s leadership about its ability to create and deliver the NFTs and also failed to make payments to G2, resulting in the esports organization seeking damages of over $5 million.
To address some concerns:
Our first NFT will be released for free.
We are using a proof of stake blockchain to validate transactions which will produce only a fraction of the environmental impact that proof of work blockchains produce.
— G2 Esports (@G2esports) June 3, 2021
G2 announced its partnership with Bondly on June 3, 2021, and addressed its fans concerns about the new technology. The links attached to the tweet and G2’s replies no longer lead to a functioning web page.
“Our first NFT will be released for free,” the tweet said. “We are using a proof of stake blockchain to validate transactions which will produce only a fraction of the environmental impact that proof of work blockchains produce.”
G2 and Bondly entered into a two-year contract on June 2, 2021, which tasked Bondly as a sales agent for G2’s NFTs, along with developing them, and that the company had to pay several fees according to the report. The fees include a $2 million for annual rights and an advanced $1.25 million that would be paid out in installments that the blockchain technology company would make up for over the course of its NFT sales.
The report said G2 alleges that after the first rights fee invoice was sent over, Bondly told G2 that it would not be able to “successfully deliver an NFT program.” Bondly at one point wanted to pause the agreement and then to terminate altogether, according to claims in the court filling.
“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, according to the Post. “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.”
G2 Esports and Bondly have yet to make public comments about the lawsuit.