📰 Mark Cuban faces class action lawsuit for promoting Voyager #crypto products $VYGVF $VOYG.TO #VGX

Mark Cuban, the billionaire entrepreneur who has been quite active in the crypto ecosystem for the past year, is facing a class-action lawsuit over his promotions of the bankrupt crypto brokerage firm Voyager Digital.

The Moskowitz Law Firm filed a civil suit in the United States District Court in Southern Florida against Cuban for promoting Voyager’s unregulated crypto products. The lawsuit demanded a jury hearing for the case.

The lawsuit alleged Cuban also misrepresented the firm on numerous occasions, making dubious claims of it being cheaper than competitors and offering “commission-free” trading services. Cuban, along with Voyager Digital CEO Stephen Ehrlich, leveraged their years of experience to lure inexperienced customers into investing their life savings in what they called a Ponzi Scheme, the lawsuit alleges

An excerpt from the lawsuit read:

“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.”

The lawsuit further alleged that Cuban continued to hype Voyager’s products and push retail investors to invest in it despite knowing it. Cuban went on record calling the Voyager platform “as close to risk-free as you’re gonna get in the crypto.” The lawsuit read:

“Voyager Platform relied on Cuban’s and the Dallas Maverick’s vocal support and Cuban’s monetary investment in order to continue to sustain itself until its implosion and Voyager’s subsequent bankruptcy.”

Voyager was one of many crypto lenders to Three Arrows Capital (3AC) that went bust after laters insolvency. The crypto lending firm paused trading activity and withdrawals on July 1 and eventually filed for chapter 11 bankruptcy on July 5. Currently, over 3.5 million American customers have nearly 5 billion dollars in cryptocurrency assets on the platform frozen.

Voyager was cleared to return $270 million in customer funds held at the Metropolitan Commercial Bank (MCB) by the judge presiding over its bankruptcy proceedings in New York. A day later, the lending firm announced that clients with U.S. dollars in their accounts could withdraw up to $100,000 in a 24-hour period starting as early as Aug. 11, with the funds received in 5–10 business days.

Source: Cointelegraph

Voyagers, today we made the difficult decision to temporarily suspend trading, deposits, withdrawals, and loyalty rewards. Read more at: https://t.co/bpGFqQtjAs

— Stephen Ehrlich (@Ehrls15) July 1, 2022

Voyagers, today we began a voluntary financial restructuring process to protect assets on the platform, maximize value for all stakeholders, especially customers, and emerge as a stronger company. Voyager will continue operating throughout.https://t.co/TxlO4eua8E

— Stephen Ehrlich (@Ehrls15) July 6, 2022

Not to also mention that Voyager Digital reportedly had deep ties with SBF-owned Alameda Research too. Financial documents of Voyager revealed that they lent nearly $1.6 billion in crypto loans to an entity registered in the British Virgin Islands, the same place Alameda is registered.

The court proceedings and financial documents have shown a deep relation between the crypto lending firm and the Sam Bankman Fried-owned Alameda Research.

Alameda is a quantitative trading firm that was also one of many borrowers from Voyager and reportedly owed $370 million.

The legal documents that verify Voyager’s loan to 3AC also show a “Counterparty A” registered in the British Virgin Islands, owing them $376.784 million. In its bankruptcy presentation, Voyager has shown Alameda owes them $377 million.

Alameda was also the biggest stakeholder in Voyager, with an 11.56% stake in the company acquired through two investments for a combined total of $110 million. When it completed the $500 million bailout, its investment was worth $17 million. Earlier this year, Alameda surrendered 4.5 million shares to avoid reporting requirements, bringing its equity down to 9.49%.

Voyager CEO Stephen Ehrlich said that after the bankruptcy court proceedings, many crypto holders on the platform would be potentially eligible to get back some of their assets along with common shares in the reorganized Voyager, Voyager tokens and proceeds from the now-defunct loan to 3AC.

The crypto contagion began with the now-defunct Terra stablecoin called TerraUSD (UST), which eventually led to the downfall of the $40 billion ecosystem. Many crypto hedge funds and lending firms exposed to Terra lost millions of dollars, which later led to the insolvency of 3AC, followed by the downfall of crypto leaders such as Celsius, BlockFi, Hodlnaut and Voyager.

Dear Valued Customer,

Below please find a hyperlink to an important document related to the bankruptcy proceedings of Voyager Digital Holdings, Inc., et al., Case No. 22-10943 (MEW):

• Notice of Hearing to Consider Approval of Disclosure Statement for the First Amended Joint Plan of Reorganization of Voyager Digital Holdings, Inc. and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code

Additional information about the cases may be obtained by visiting https://cases.stretto.com/Voyager, calling 855.473.8665 (Toll-Free) or 949.271.6507 (International), or emailing us at VoyagerInquiries@stretto.com. To subscribe to future case notifications, including court filings and upcoming dates, please visit https://cases.stretto.com/Voyager/court-docket-subscription/.

From an email sent to Voyager customers on August 15th, 2022