Billionaire investor and owner of Dallas Mavericks, Mark Cuban has landed himself in a fresh legal brawl as the Moskowitz Law Firm has filed a class action lawsuit against the vocal crypto advocate.
The lawsuit was filed with the United States District Court in Southern Florida and alleges that Cuban helped promote Voyager’s products which are classified as unregistered securities.
As detailed by the filing, Mark Cuban and Voyager Digital’s CEO, Stephen Erlich used their experiences to lure unsuspecting investors to inject funds into Voyager’s business even though the model is unsustainable.
“Cuban and Ehrlich, as will be explained, went to great lengths to use their experience as investors to dupe millions of Americans into investing—in many cases, their life savings—into the Deceptive Voyager Platform and purchasing Voyager Earn Program Accounts (“EPAs”), which are unregistered securities,” the lawsuit reads.
The plaintiff claims that by virtue of the promotional activities of Mark Cuban, as many as 3.5 million Americans invested in Voyager Digital and have all lost a cumulative of $5 billion. The lawsuit is holding Erlich, Cuban, and Dallas Mavericks responsible, and damages are being demanded.
The Downfall of Voyager Digital
Voyager Digital offers crypto lending and general trading services and amongst the push from Mark Cuban is that the firm offers cheaper products at free commissions. The publicity provided by Voyager Digital depicts that the company’s product is more attractive than its competitors.
While Voyager Digital’s woes did not come from the broad product offerings, its struggles came from the default of the $650 million loan extended to the now bankrupt Three Arrows Capital (3AC).
Voyager Digital has since filed for bankruptcy and while it has opened its doors for a bailout from more liquid industry veterans, the offer it received from FTX Derivatives Exchange and Alameda Research has been rejected by the embattled company’s legal representatives.
Voyager Digital has a number of assets it hopes to liquidate in its bid to settle its clients. The firm recently received approval to liquidate its cash held in the bank worth $270 million as its customers who have funds in fiat will be able to withdraw as much as $100,000.
While known as a crypto advocate, Mark Cuban has recently come out to shun the potential of metaverse lands, calling it the dumbest shit ever.