The National Basketball Association (NBA) is embroiled in a lawsuit claiming association with the collapsed crypto exchange Voyager Digital Holdings, leading to investor losses totaling $4.2 billion.
According to Bloomberg, investors allege that the NBA’s involvement in a marketing deal between Voyager and former Dallas Mavericks owner Mark Cuban was “grossly negligent.”
This lawsuit adds to previous legal actions against Cuban for endorsing the exchange, which investors deemed “an unregulated and unsustainable fraud” following its 2022 collapse.
Several NBA teams, including the Mavericks, had marketing deals with crypto firms, including the now-defunct FTX exchange, whose founder was convicted of fraud.
In addition to the NBA, Voyager’s attorneys, McCarter & English, are named as defendants, accused of providing “fraudulent legal opinions” and participating in a conspiracy to promote the crypto exchange.
While the NBA’s General Counsel Rick Buchannan has not yet commented on the lawsuit, the plaintiffs hold the NBA accountable for promoting Voyager’s “unregistered securities,” leading to damages.
The collapse of FTX in 2022 triggered lawsuits against celebrities, including sports figures like Tom Brady and Steph Curry, and comedian Larry David, who endorsed crypto investments.
Cuban’s partnership deal with Voyager in 2021, featuring Voyager ads in the Mavericks’ arena, is under scrutiny. Cuban, who sold his majority stake in the Mavericks in December 2022, has faced accusations of misrepresenting Voyager’s safety, which he denies vehemently.
Voyager filed for Chapter 11 bankruptcy protection in 2022, leading to the court’s authorization of asset liquidation to repay customers. The investors argue that the NBA took significant risks by endorsing Voyager and FTX, potentially promoting unregistered and illegal securities using its global brand reputation.
