A class-action lawsuit has been filed against Mark Cuban, a wealthy businessman who has been quite engaged in the cryptocurrency environment in recent months, for his support of the insolvent cryptocurrency brokerage Voyager Digital.
One of the several cryptocurrency lenders to Three Arrows Capital (3AC) that failed after subsequent insolvency was Voyager. On July 1, the crypto lending company halted trading and withdrawals, and on July 5, it eventually filed for chapter 11 bankruptcy. Nearly 5 billion dollars worth of bitcoin owned by over 3.5 million American users is currently frozen.
The judge presiding over Voyager’s bankruptcy proceedings in New York gave the company permission to refund $270 million in client funds stored at the Metropolitan Commercial Bank (MCB). A day later, the loan company said that beginning on August 11, customers having U.S. dollars in their accounts could withdraw up to $100,000 in a 24-hour period, with the money arriving in 5–10 working days.
Cuban was sued by The Moskowitz Law Firm in civil court in Southern Florida for advertising Voyager’s unlicensed cryptocurrency products. A jury trial was demanded in the action.
Based on the lawsuit, Mark Cuban misrepresented Voyager’s cryptocurrency goods and services and used his years of experience to entice naïve clients into spending their whole life assets.
He was accused of repeatedly misrepresenting the company, including making questionable claims that it offered “commission-free” trading services and was less expensive than rivals. The lawsuit claims that Cuban and the CEO of Voyager Digital, Stephen Ehrlich, used their years of experience to entice uninformed clients into investing their life savings in what they referred to as a Ponzi Scheme.
“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,” an excerpt from the lawsuit.
In spite of knowing this, the lawsuit claimed that Cuban kept promoting Voyager’s products and urged ordinary investors to invest in them. According to statements made by Cuban, the Voyager platform is “as close to risk-free as you’re gonna to get in the crypto.”