The National Basketball Association (NBA) is facing a lawsuit over its association with failed crypto exchange Voyager Digital Holdings, with investors alleging losses totaling $4.2 billion.
The lawsuit claims the NBA’s involvement in a marketing deal between Voyager and Mark Cuban, former owner of the NBA’s Dallas Mavericks, was “grossly negligent,” Bloomberg reported.
The lawsuit follows previous legal action against Cuban for his endorsement of the exchange, which investors labeled as “an unregulated and unsustainable fraud” following its 2022 collapse.
Notably, several NBA teams, including the Mavericks, had marketing deals with crypto firms, including the now-defunct FTX exchange, whose founder was convicted of fraud.
The investors also named Voyager’s attorneys, McCarter & English, as defendants, alleging the firm provided “fraudulent legal opinions” and participated in a conspiracy to promote the crypto exchange. McCarter & English have vowed to vigorously defend themselves, asserting they provided sound legal advice to their clients.
NBA Promoted Voyager’s “Unregistered Securities”
The NBA’s General Counsel, Rick Buchannan, has not yet responded to requests for comment on the lawsuit. The suit accuses the NBA of promoting Voyager’s “unregistered securities,” holding it liable for resulting damages.
The collapse of FTX in 2022 triggered lawsuits against celebrities, including sports figures Tom Brady and Steph Curry, and comedian Larry David, who endorsed crypto investments. Some settlements have been reached, involving personalities like Kim Kardashian and NFL quarterback Trevor Lawrence.
Cuban’s five-year partnership deal with Voyager in 2021, which made its token the official Mavericks cryptocurrency and featured Voyager ads in the team’s arena, is under scrutiny. Cuban has previously faced accusations of misrepresenting the safety of Voyager, which he vehemently denies. He sold his majority stake in the Mavericks in December 2022.
Voyager filed for Chapter 11 bankruptcy protection in 2022, with a court authorizing the liquidation of assets to repay customers. The investors allege the NBA took significant risks by endorsing Voyager and FTX, leveraging its global brand reputation to promote what they consider unregistered and illegal securities.
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