A handful of individuals have taken on billionaire Mark Cuban, the Dallas Mavericks basketball team, and Stephen Ehrlich, CEO of Voyager Digital LTD., over the crypto trading platform’s collapse and the loss of over 5 billion dollars of investors’ cryptocurrency assets. Wednesday’s securities law complaint comes after Voyager filed for bankruptcy in July.
The 92-page pleading filed in Miami, Fla. federal court said that Cuban and Ehrlich duped investors into purchasing Voyager Earn Program Accounts (EPAs), which it claimed are unregistered securities. Described as “one of the most utilized avenues for nascent investors to purchase cryptocurrency,” the platform has been hugely successful since 2019, the complaint said.
It reportedly targeted young and inexperienced investors and made representations that trading is commission free while assuring customers that they receive the best price on trades. Yet, those statements were false and misleading, the suit said.
It also pointed to numerous talking points from Cuban, described as a “well-known businessman, investor, television and media personality, and the team owner of the American professional basketball team, the Dallas Mavericks,” who was said to have hyped the scheme. The filing alleged that Cuban and the Dallas Mavericks’ vocal support and Cuban’s money were critical to the platform’s sustainability prior to its implosion and subsequent bankruptcy.
The complaint follows a suit filed by the same counsel, The Moskowitz Law Firm PLLC, in December 2021 against Voyager over the collapse. The proceeding moved through discovery and motion practice on issues relating to arbitration and personal jurisdiction over the Voyager entities, but was stayed as a result of Voyager’s filing for Chapter 11 bankruptcy.
Since then, “the news broke that Voyager’s irresponsible lending activities drove them to lose hundreds of millions of dollars of customer cryptocurrency assets,” prompting the plaintiffs to file the instant action which seeks the return of funds to investors from Ehrlich, Cuban, and his Dallas Mavericks. The filing states class claims for relief under consumer and securities statutes, including those in Florida, New Jersey, California, Pennsylvania, Oklahoma, Tennessee, Alabama, Virginia, or Louisiana.
