Mark Cuban is facing a lawsuit for promoting Voyager Digital
Billionaire crypto investor Mark Cuban is facing criticism from Voyager investors and Dallas Mavericks fans. He is facing a lawsuit for promoting Voyager Digital, a crypto lender that has since filed for bankruptcy protection.
Mark Cuban is facing a lawsuit for promoting bankrupt Voyager Digital
Mark Cuban is a billionaire investor who has shown great interest in cryptocurrency. Cuban has been promoting various cryptocurrencies and crypto firms, including Voyager and Dogecoin.
The billionaire is now facing a lawsuit that claims he promoted unregulated cryptocurrency products. The court documents reveal that the plaintiffs complained that Cuban, alongside the CEO of Voyager Digital, Stephen Ehrlich, targeted young and inexperienced fans and duped them into using their savings to buy Bitcoin and other cryptocurrencies on Voyager Digital. They did this by promoting the platform on multiple occasions.
The lawsuit also added that Cuban made “misrepresentations to the plaintiffs.” The failure to disclose the commissions earned on crypto trades made through Voyager was concerning. Moreover, Cuban failed to provide accurate information regarding Voyager’s insurance status with the Federal Reserve and Federal Deposit Insurance Corporation (FDIC).
This allegation comes from the Federal Reserve issuing a statement that the FDIC does not insure Voyager’s deposits. The plaintiffs have also continued to attack Cuban and Ehrlich, adding that the two made a lot of effort to use their experience to solicit money from millions of US investors.
The investors also claimed that the Voyager Earn Program Accounts offered “unregistered securities. Cuban is also accused of pouring his investments into these products to lure retail investors into doing the same. The lawsuit has been filed by the Moskowitz law firm in the US District Court in Southern Florida, and a jury hearing for the case has been demanded.
Partnership between Voyager and Mark Cuban
Voyager Digital revealed a partnership with Dallas Mavericks in October 2021. At the time, Voyager Digital was declared the official crypto brokerage and global partner of the NBA team. Cuban strongly supported this partnership deal.
Voyager Digital filed for bankruptcy in July this year. The bankruptcy filing followed the fall of other leading DeFi platforms such as Celsius and Babel Finance. Three Arrows Capital which had a $680 million loan taken on Voyager, also filed for bankruptcy, which created a liquidity crunch at Voyager, and the exchange was forced to halt withdrawals.
Both Cuban and the Dallas Mavericks faced strong opposition after Voyager filed a Chapter 11 bankruptcy protection. Voyager’s bankruptcy filing revealed that the exchange had more than 100,000 creditors and that the company’s assets ranged from $100 to $10 billion. Voyager also rejected a takeover offer from FTX.