By
Mayowa Adebajo
April 11th, 2024
Voyager Digital’s bankruptcy hearings are well underway, and while the firm is open to different workable solutions to get back on its feet, some factors currently stand as a major bottleneck across the board.
Beleaguered crypto lending platform, Voyager Digital has asked the court to dismiss the lawsuit filed by a group of investors against its Chief Executive Officer (CEO), Stephen Erlich, and Mark Cuban, the owner of Dallas Mavericks. Both men were sued earlier this month as they were accused of preying on inexperienced investors with promotional activities that made them invest in Voyager’s products prior to its bankruptcy.
Voyager Digital Wants Court to Halt the Lawsuit
Voyager Digital’s lawyers have argued that with a bankruptcy filing, the company is protected from temporary lawsuits and they believe the immunity should extend to key figures in the company. With the lawsuit against Erlich and Cuban tied together, the company wants the court to throw out the case.
Voyager Digital was once a high-flying crypto investments and lending platform and on more than one occasion, the company’s products have been promoted by the Dallas Mavericks boss.
“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,” the lawsuit filed against the duo quoted Mark Cuban shilling the platform.
An excerpt from the lawsuit also revealed that the indicted business leaders went to great lengths 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.”
In the lawsuit, it was alleged that Mark Cuban knew that Voyager’s products are a scam, yet he encouraged investors to invest in the platform. Following the bankruptcy, chances are high that the crypto lender’s investors will not be able to regain 100% of their frozen assets.
The Road to Recovery
Voyager Digital’s bankruptcy hearings are well underway, and while the firm is open to different workable solutions to get back on its feet, some factors currently stand as a major bottleneck across the board.
The loan recovery from Three Arrows Capital (3AC) is still one of the major factors that will determine how fast, and how well Voyager Digital’s current creditors will laugh last at the end of the day. In the wake of the general turmoil that waded through the length and breadth of the digital currency ecosystem, Voyager Digital issued a default notice for a $650 million loan to Three Arrows Capital (3AC).
3AC on its own is facing a liquidation process as ordered by a Court in the British Virgin Islands. Three Arrows Capital also has a bankruptcy proceeding in the United States, and the recovery of the defaulted funds owed to Voyager Digital will have to wait until these hearings are concluded.
It is unclear what the court’s ruling with respect to the request to dismiss the lawsuit against Erlich and Cuban will be, but the firm is making all attempts to lighten its legal challenges across the board.