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August 11, 2022

Mark Cuban sued for promoting crypto products

Mark Cuban, a wealthy entrepreneur who has been extremely engaged in the crypto world over the last year, is facing a class-action lawsuit for his promotion of the defunct cryptocurrency brokerage business Voyager Digital.

The Moskowitz Law Firm filed a civil claim against Cuban in the United States District Court for the Southern District of Florida for advertising unlicensed crypto items from Voyager. The complaint sought that the matter is heard by a jury.

The complaint said that Cuban repeatedly misrepresented the company, including questionable claims that it was cheaper than rivals and offered “commission-free” trading services. The complaint says that Cuban and Voyager Digital CEO Stephen Ehrlich used their years of expertise to convince naïve consumers to spend their life savings in a Ponzi scheme.

A portion of the complaint reads:

“Cuban and Ehrlich went to great efforts to leverage their knowledge as investors to defraud millions of Americans into investing — in many instances, their life savings — in the Deceptive Voyager Platform and acquiring unregistered Voyager Earn Program Accounts (‘EPAs’).”

Despite knowing this, Cuban allegedly continued to promote Voyager’s goods and encourage individual investors to participate in the company. Mark Cuban described the Voyager platform as “about as risk-free as you’re going to get in crypto.” The complaint stated:

“Voyager Platform depended on Cuban’s and the Dallas Mavericks’ verbal backing and Cuban’s financial involvement until its downfall and eventual bankruptcy.”

Voyager was one of the several crypto lenders to Three Arrows Capital (3AC) that failed after the latter’s collapse. The cryptocurrency lending company ceased trading and withdrawals on July 1 and then filed for chapter 11 bankruptcy on July 5. Currently, approximately $5 billion in bitcoin assets belonging to over 3.5 million American consumers are locked on the site.

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The court hearing over Voyager’s bankruptcy proceedings in New York has authorized the release of $270 million in client cash held at Metropolitan Commercial Bank (MCB).

The next day, the lending company stated that customers holding U.S. dollars in their accounts may withdraw up to $100,000 in a 24-hour period beginning on August 11, with the monies arriving between 5–10 working days.