Cuban & Mavericks facing a $5 billion class action lawsuit- crypto related

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A group of Voyager Digital customers filed a class-action suit in Florida federal court against Cuban, as well as the basketball team he owns, the Dallas Mavericks, alleging their promotion of the crypto platform resulted in more than 3.5 million investors losing $5 billion collectively. Voyager Digital's CEO, Stephen Ehrlich, was also named as a defendant in the suit.

Voyager, a New Jersey-based crypto firm, filed for Chapter 11 bankruptcy in July following a crash in crypto prices that instigated a liquidity crunch on the platform. The firm is one of many that got burned after loaning money, in Voyager's case worth ~$600 million, to hedge fund Three Arrows Capital (3AC). 3AC declared bankruptcy in the wake of the Terra collapse, triggering a domino effect throughout the crypto markets when the hedge fund defaulted on more than $3.5 billion worth of obligations to its lenders.

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The lawsuit also specifically calls out Voyager's Earn Program Accounts (EPAs), claiming they are unregistered securities.

The Mavericks launched their exclusive, five-year partnership with Voyager in October 2021, giving fans cash rewards for making trades on the platform. The announcement said the cryptocurrencies were “an attractive investment for novice investors who might only have $100 to start.”

According to the lawsuit filed today, Cuban also promoted the company "as a Voyager customer himself, in a ploy to dupe investors into believing that Voyager was a safe platform."
Although the partnership with the Mavericks was disclosed, the lawsuit alleges that Cuban did not disclose the compensation he personally received to promote Voyager.

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"During the runup in crypto prices, many web3 companies, apparently including Voyager, pretended that existing laws and regulations did not apply to crypto," Seppinni wrote in an email to TechCrunch. "Even smart people like Mark Cuban got caught up in the hype. But now that crypto prices have crashed it's plain to see that centuries-old legal theories like fraud, breach of fiduciary duty, and civil conspiracy are as applicable to crypto as they are elsewhere."

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