By
Bhushan Akolkar
April 26th, 2024
The lawsuit also names Voyager Digital’s law firm McCarter & English. It is alleged that the firm played on its credibility to issue a bogus “legal opinion” that Voyager’s native utility token Voyager Token (VGX) was not an unregistered security.
A group of aggrieved Voyager Digital investors has sued the National Basketball Association (NBA) for its alleged role in the losses they suffered on the now-defunct platform. According to the proposed class-action lawsuit, the NBA exhibited gross negligence when it approved a promotional deal between Voyager Digital and the Dallas Mavericks basketball team.
The suit was filed on February 6 in a Miami district court and states that it simply seeks to hold the NBA liable for losses of over $4.2 billion suffered by investors. It added that the NBA’s widespread promotion of Voyager’s unregistered securities renders it liable for any and all resulting damages.
Voyager teams up with the @dallasmavs as their official crypto brokerage & international partner 🏀🌎
Catch the official press conference live at 4 PM CT // 5 PM ET, with the Mavs, @Ehrls15, and @mcuban.
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— Voyager (@investvoyager) October 27, 2021
According to the class group, the NBA was faced with the loss of billions of dollars in television revenues and “empty arenas” due to the Covid-19 pandemic and “deliberately decided to embrace the risks” of working with crypto firms like Voyager and FTX for “billions in promotional compensation.”
The lawsuit also names Voyager Digital’s law firm McCarter & English. It is alleged that the firm played on its credibility to issue a bogus “legal opinion” that Voyager’s native utility token Voyager Token (VGX) was not an unregistered security and assure potential investors and partners that the platform’s offerings were completely “above board.”
The discontented investors had sued former Dallas Mavericks owner Mark Cuban in 2022 for promoting “an unregulated and unsustainable fraud”. They claim that he talked up Voyager while misrepresenting how safe it was – allegations he has denied. Cuban entered a five-year deal with Voyager that made VGX the Mavericks’ official cryptocurrency and saw Voyager advertisements in the team’s arena. The businessman went on to sell his majority stake in the basketball team in December of 2022.
The February 6 filing states that the “extensive discovery” in that case made it clear that the NBA and McCarter & English had to “bear responsibility to the proposed class for the $4.2 billion in damages resulting from the implosion of Voyager’s crypto exchange”. The law firm has denied the assertions, vowing to aggressively defend itself.
Voyager Digital paused withdrawals and filed for Chapter 11 bankruptcy, citing exposure to the defunct crypto hedge fund Three Arrows Capital (3AC). A court later authorized the liquidation of its assets to repay aggrieved investors.
Several celebrities, athletes, and sporting organizations have been beset with lawsuits following the implosion of crypto firms such as 3AC, FTX, and Voyager. Following the collapse of FTX, the Mercedes F1 Team, Major League Baseball, football star Tom Brady, NBA star Steph Curry, basketball commentator Shaquille O’Neal, comedian Larry David, and others have been sued for their role in promoting the platform.