NBA Faces Lawsuit Over Failed Crypto Marketing Deal
Investors are claiming that the NBA’s marketing deal with Voyager led to significant losses when the company collapsed during the crypto market downturn of 2022. The lawsuit alleges that the NBA was negligent in promoting Voyager’s “unregistered securities,” making it responsible for damages. Several NBA teams, including Mark Cuban’s Dallas Mavericks, had deals to promote crypto companies like Voyager and FTX, which also failed.
Accusations of Unregistered Securities Promotion
The lawsuit, filed in Miami, accuses the NBA of promoting billions of dollars in unregistered and illegal securities by leveraging its global reputation and trust. The investors claim that the NBA knowingly embraced the risks associated with cryptocurrency exchanges and went all-in on promoting these companies.
Voyager’s law firm, McCarter & English, is also facing a lawsuit for allegedly providing fraudulent legal opinions backing Voyager. However, the firm denies these allegations.
Claims Against Voyager and Its Lawyers
The lawsuit asserts that the NBA deal allowed Voyager to use the league’s reputation to sell illegal crypto securities. It also accuses Voyager’s lawyers of lending credibility by stating that its VGX token was not an unregistered security.
The plaintiffs are seeking damages from Mark Cuban’s recent sale of the Dallas Mavericks, as well as from Stephen Ehrlich, co-founder of Voyager, who is facing separate allegations of fraudulent solicitation.
Increase in Crypto Lawsuits
Mark Cuban had a five-year partnership deal with Voyager and promoted their token as the official cryptocurrency of the Dallas Mavericks. The collapse of FTX, which had a similar deal with the NBA’s Miami Heat, led to a wave of lawsuits against celebrities and athletes who endorsed crypto exchanges and companies.
Hot Take: The NBA Faces Legal Consequences for Failed Crypto Marketing
The NBA is now facing the consequences of its failed marketing deal with Voyager. Investors allege that the league promoted unregistered securities and leveraged its reputation to sell illegal crypto assets. This lawsuit highlights the risks associated with endorsing cryptocurrency companies and the potential legal repercussions. As more cases emerge, it becomes clear that celebrities, athletes, and organizations must exercise caution when entering into partnerships with crypto firms. The outcome of this lawsuit could set a precedent for future legal actions against those involved in promoting cryptocurrencies.
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