Mark Cuban, Mavericks in hot water over Voyager 'Ponzi scheme'

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Source: TechCrunch

Mark Cuban, Mavericks in hot water over Voyager 'Ponzi scheme'

Anita Ramaswamy@anitaramaswamy / 3:42 PM EDT•August 11, 2022

Lawsuits from disgruntled investors are beginning to stack up after crypto prices plummeted over the past few months, leaving them with steep losses. Billionaire Mark Cuban is the latest celebrity on the receiving end of investor ire.

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.

The plaintiffs in the suit against Cuban described Voyager as “an unregulated and unsustainable fraud, similar to other Ponzi schemes.” They claim in the complaint that Cuban and Ehrlich personally reached out to investors both individually and through a partnership with the Dallas Mavericks, to encourage them to invest with the platform. The lawsuit also specifically calls out Voyager’s Earn Program Accounts (EPAs), claiming they are unregistered securities.

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Read more: https://techcrunch.com/2022/08/11/mark-cuban-mavericks-face-lawsuit-over-crypto-voyager-ponzi-scheme/