The NBA Faces Lawsuit Over Association with Failed Crypto Exchange Voyager
The National Basketball Association (NBA) is currently dealing with a lawsuit filed by investors who claim losses totaling $4.2 billion due to the association between the NBA and failed crypto exchange Voyager Digital Holdings. The lawsuit alleges that the NBA’s involvement in a marketing deal between Voyager and former Dallas Mavericks owner Mark Cuban was “grossly negligent.”
Previous Legal Action Against Mark Cuban
This lawsuit follows previous legal action taken against Mark Cuban for his endorsement of the exchange, which investors labeled as “an unregulated and unsustainable fraud” after its collapse in 2022.
NBA Teams’ Marketing Deals with Crypto Firms
Several NBA teams, including the Mavericks, had marketing deals with crypto firms such as the now-defunct FTX exchange. The founder of FTX was convicted of fraud.
Investors Name Voyager’s Attorneys as Defendants
The investors have also named Voyager’s attorneys, McCarter & English, as defendants in the lawsuit. They allege that the firm provided “fraudulent legal opinions” and participated in a conspiracy to promote the crypto exchange.
NBA Accused of Promoting “Unregistered Securities”
The lawsuit accuses the NBA of promoting Voyager’s “unregistered securities,” making it liable for any resulting damages. The NBA’s General Counsel, Rick Buchannan, has not yet commented on the lawsuit.
Collapse of FTX Triggers Lawsuits Against Celebrities
The collapse of FTX in 2022 has led to lawsuits against celebrities who endorsed crypto investments, including sports figures Tom Brady and Steph Curry, and comedian Larry David. Some settlements have been reached involving personalities like Kim Kardashian and NFL quarterback Trevor Lawrence.
Scrutiny Over Mark Cuban’s Partnership Deal with Voyager
The five-year partnership deal between Mark Cuban and Voyager in 2021 is under scrutiny. The deal made Voyager the official Mavericks cryptocurrency and featured Voyager ads in the team’s arena. Cuban has faced accusations of misrepresenting the safety of Voyager, which he vehemently denies. He sold his majority stake in the Mavericks in December 2022.
Accusations Against NBA for Endorsing Risky Crypto Investments
Voyager filed for Chapter 11 bankruptcy protection in 2022, leading to the liquidation of assets to repay customers. The investors argue that the NBA took significant risks by endorsing Voyager and FTX, using its global brand reputation to promote what they consider unregistered and illegal securities.
Hot Take: Lawsuit Puts NBA’s Reputation at Stake
The lawsuit against the NBA and Mark Cuban over their marketing deals with failed crypto exchange Voyager raises serious questions about the association between professional sports and the crypto industry. It highlights the potential risks and legal consequences for athletes, celebrities, and organizations that endorse or promote crypto investments without proper due diligence. This case serves as a reminder that caution is necessary when entering into partnerships with crypto firms, especially those lacking regulatory compliance and transparency. The outcome of this lawsuit could have far-reaching implications for the NBA’s reputation and future involvement in the crypto space.
Wyatt Newson emerges as a luminary seamlessly interweaving the roles of crypto analyst, dedicated researcher, and editorial virtuoso. Within the dynamic canvas of digital currencies, Wyatt’s insights resonate like vibrant brushstrokes, capturing the attention of curious minds across diverse landscapes. His ability to untangle intricate threads of crypto intricacies harmonizes effortlessly with his editorial mastery, transmuting complexity into a compelling narrative of comprehension.