NBA has been Sued for Promoting Voyager Digital: Details

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The National Basketball Association (NBA), a professional basketball league in North America composed of 30 teams, has been sued over its marketing deals with the bankrupt digital asset lending platform Voyager Digital, where users claimed to have lost nearly $4.2 billion. 

As reported earlier by TheCoinRise, Binance, the world’s largest crypto trading platform by market volume, decided to bail out the bankrupt crypto lending platform but backed out of the deal at the last moment, citing the volatile and unfriendly crypto regulatory environment in the US.

NBA Faces Class-Action Lawsuit

A class-action lawsuit was filed against the NBA, which stated that the association was “grossly negligent” when it approved the marketing deal between the bankrupt digital asset lending platform and the Dallas Mavericks, the team formerly `owned by crypto enthusiast Mark Cuban. 

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In the 100-page lawsuit filed on Wednesday in a Miami district court, the filing highlighted the marketing from the two firms and alleges the NBA was meant to “serve as the ‘gatekeeper.’”

On the other hand, it is crucial to note that Voyager is getting ready to relaunch its app and enable users to finally withdraw their money. Interestingly, clients and creditors of the bankrupt firm may get their delayed funds in the upcoming weeks.

NBA is Liable

The plaintiffs claim that NBA “deliberately decided to embrace the risks” of working with crypto exchanges such as Voyager, Coinbase, and the bankrupt exchange founded by Sam Bankman-Fried, FTX. They add that the association accepted “billions in promotional compensation” as it faced “empty arenas and the loss of billions in television revenues” due to the pandemic.

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“This lawsuit simply seeks to hold the NBA liable,” the class group claims. “The NBA’s widespread promotion of Voyager’s unregistered securities renders it liable for any and all resulting damages.”

McCarter & English are also Named in the Lawsuit

McCarter & English, the law firm representing Voyager Digital, has also been named in the lawsuit. The plaintiffs claim that the firm leveraged its credibility to issue “a bogus ‘Legal Opinion’” that Voyager’s token VGX wasn’t an unregistered security and “assuage the concerns of potential investors and partners” that Voyager’s offerings were “entirely above board.”

More importantly, the same class action group also sued Cuban, stating that he promoted Voyager and misrepresented how safe it was.

Fraud Charges

The Commodity Futures Trading Commission (CFTC) accused Stephen Ehrlich, co-founder and former CEO of the now-defunct Voyager Digital, of fraud charges and alleged that he engaged in fraudulent activities by enticing individuals to participate in and manage a digital asset trading and custody platform.

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