The lawsuits from disgruntled investors are starting to pile up after the recent plunge in the prices of cryptocurrencies. Mark Cuban is a billionaire.
A group of Voyager Digital customers filed a class-action suit in Florida federal court against Cuban, as well as the basketball team he owns, the Dallas Mavericks, accusing them of causing more than 3.5 million investors to lose billions of dollars. Stephen Ehrlich is the CEO of the company.
The New Jersey-based firm filed for Chapter 11 reorganization in July after a crash in the price of cryptocurrencies. One of the firms that got burned after loaning money is Voyager. In the wake of the Terra collapse, 3AC declared bankruptcy, causing a domino effect in the markets.
The suit against Cuban said that the scheme was similar to other Ponzi schemes. The complaint states that Cuban and Ehrlich reached out to investors individually and through a partnership with the Dallas Mavericks to encourage them to invest with the platform. The lawsuit claims that the earn program accounts are not securities.
Fans who make trades on the platform will receive cash rewards from the Mavericks. The announcement stated that the cryptocurrencies were an attractive investment for beginners.
Cuban promoted the company as a customer himself in order to fool investors into believing that the platform was safe. The lawsuit claims that Cuban did not tell the public about the compensation he received to promote the game.
Cuban and the Mavericks were not reachable for comment.
The founder of Seppinni, a law firm, was contacted by the website for his thoughts on the suit. The Department of Justice pre-indictment investigations were one of the things Seppini worked on when he was a lawyer.
According to Seppinni, many web3 companies pretended that existing laws and regulations didn't apply tocryptocurrencies. Mark Cuban became caught up in the hype. It is plain to see that centuries-old legal theories like fraud, breach of fiduciary duty, and civil conspiracy are still applicable tocryptocurrencies.
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