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Mark Cuban was accused of promoting Voyager’s products and encouraging retail investors to invest in them, despite knowing about the illicit scheme.
Billionaire entrepreneur and owner of the Dallas Mavericks, Mark Cuban, has been hit with a lawsuit by fans of his team for his involvement in the promotion of now-bankrupt firm, Voyager Digital.
The class-action lawsuit against the billionaire was filed by the Moskowitz Law Firm in the US District Court in Southern Florida. According to the lawsuit, Mark Cuban and Stephen Ehrlich, the CEO of Voyager Digital, lured young and inexperienced investors who happened to be fans of his professional basketball team, to invest their cash in the brokerage firm.
The lawsuit also accused the duo of running a Ponzi scheme and repeatedly misrepresenting the platform, which led to many young investors losing their entire savings. Cuman and Ehrlich reportedly advertised the firm as a commission-free platform that required no fees and was less expensive than its rivals.
Investors, however, allegedly paid inflated rates and hidden fees, all of which happened without the investor’s knowledge.
The lawsuit quoted Mr. Cuban as having said:
“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.”
An excerpt from the lawsuit also read:
“Cuban and Ehrlich, 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.”
Mark Cuban was again accused of promoting Voyager’s products and encouraging retail investors to invest in them, despite knowing about the illicit scheme. Cuban is believed to have described Voyager Digital to be “as near to risk-free as you’re going to get in the crypto” on the record, the lawsuit read.
The lawsuit further read that “Voyager Platform relied on Cuban’s and the Dallas Mavericks’ vocal support and Cuban’s monetary investment in order to continue to sustain itself until its implosion and Voyager’s subsequent bankruptcy.”
Voyager Digital filed for Chapter 11 bankruptcy at the beginning of July. All trades, deposits, and withdrawals on the company’s platform were subsequently put on hold.
The bankruptcy filing also revealed that there were over 100,000 creditors and estimated assets ranging from $1 billion to $10 billion. Almost 5 billion dollars worth of cryptocurrency assets owned by over 3.5 million American users is currently frozen on the platform.
Voyager Digital released a statement on August 5th stating that cash withdrawals on the platform would resume on 11th August. The announcement came following the court’s approval of the company’s request to provide users access to money kept at the Metropolitan Commercial Bank once again.