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Mark Cuban is being sued by Voyager Digital investors and followers of his basketball club, the Dallas Mavericks, for promoting the July insolvent company.
Mark Cuban, the billionaire owner of the Dallas Mavericks basketball club, is facing a class action lawsuit from Voyager Digital investors and Mavericks supporters for marketing Voyager Digital, which declared bankruptcy on July 5, 2022.
According to the plaintiffs, Cuban pushed Voyager Digital to Maverics supporters on many occasions and allegedly preyed on naïve basketball enthusiasts. The complaint contains various remarks from Cuban advertising Voyager Digital, such as this one:
“I gotta add, I am a [Voyager] customer and I’ve been a customer for several months now. I like to use it, it’s easy, it’s cheap, it’s fast, and the pricing is actually really good, so we find it as a perfect fit for our Mavs fans and reaching Mavs fans of all ages.”
Plaintiffs contend that Cuban promoted Voyager Digital as being commission-free and generally less expensive than its competitors. However, the complaint claims that the investors were unaware of hidden fees and excessively high pricing.
Taking advantage of the audience
According to the lawsuit, Voyager Digital's CEO, Steve Ehrlich, also assisted in duping Maverics fans into investing in the project. The complaint contains remarks from Ehrlich and Cuban's news conference at the Dallas Mavericks.
During his conference speech, Cuban stated that there is no way to gain without first investing, but with Voyager Digital, consumers may earn by investing tiny sums. He stated:
“digital currencies[are] an attractive investment for novice investors who might only have $100 to start. That’s where Voyager enters the picture. […] Voyager platform makes the process easy and simplified for fans of all ages. […] You don’t have to spend a lot of money in order to learn.”
In addition to pushing the concept of investing little to make a lot, Cuban cited a lack of knowledge in the industry. Most people don't grasp the principles of cryptocurrency, according to him, and Voyager Digital will "attempt to deliver that degree of knowledge to our followers and joint clients."
Ehrlich backed Cuban up by highlighting Voyager Digital's user-friendly design and the significant acceleration of crypto adoption rates.
Furthermore, Cuban was caught on tape declaring that Voyager Digital is completely risk-free. A complainant specifically notes this remark and states:
“[I] saw many statements from Mark Cuban stating that Voyager was “100% Risk Free, and it’s as close to risk free as you are going to get in the crypto universe . . . [Mark Cuban’s] trust in Voyager [] made me purchase the coin from Voyager . . .”
Voyager Digital declares bankruptcy
Three Arrows Capital (3AC) filed for Chapter 11 bankruptcy a few days after Voyager Digital. 3AC owes Voyager Digital $15,250 Bitcoins and $350 million USDC, according to Voyager Digital. The Chapter 11 bankruptcy permits the company to continue operating while reorganizing its internal operations and business strategies.
Ehrlich cited 3AC's debt and negative market circumstances as grounds for the bankruptcy. He further stated that the Chapter 11 bankruptcy was a planned decision made by the team before Voyager had gone beyond the threshold of being salvaged.
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