Mark Cuban is no stranger to the crypto ecosystem. He is now facing a class action lawsuit over his promotions from the bankrupt crypto broker called Voyager Digital.
Charges against Cuban
It is reported that the law firm Moskowitz has filed a civil suit in the US court in South Florida against Cuban. This is due to the promotion of Voyager’s unregulated crypto products.
It is alleged that Cuban also misrepresented the company on numerous occasions. Questionable claims were said to have been made that it would be cheaper than competitors and offered “commission-free” trading services. Cuban, along with Voyager Digital’s CEO Stephen Ehrlich, used their years of experience to entice inexperienced customers to invest their savings in what they called a “Ponzi” scheme, the prosecution said. The Prosecutor will state the following in the filing:
Cuban and Ehrlich went to great lengths to use their experience as investors to entice millions of Americans to invest, in many cases their savings, in the Deceptive Voyager Platform and to buy Voyager Earn Program Accounts (“EPAs”), which are not -registered securities.
Encouraging investment
According to the prosecutor, Cuban also continued to “hype” Voyager’s products. This would attempt to entice retail investors to invest. Cuban is said to have called the Voyager platform “as close to risk-free as you’re going to get in crypto”. The indictment stated the following:
Voyager Platform relied on the vocal support of Cuban and the Dallas Maverick and Cuban’s monetary investment to sustain itself until Voyager’s implosion and subsequent bankruptcy.
Voyager was one of the many crypto lenders of Three Arrows Capital (3AC) that have since gone bankrupt. The crypto lending company paused trading and withdrawals on July 1, and finally filed for bankruptcy on July 5. Currently, more than 3.5 million US customers have frozen nearly $5 billion in cryptocurrency assets on the platform. It is not known when exactly they will get their money back. It is also not known what the punishment of Cuban will be, as the trial has not yet started.
