Mark Cuban is being sued for promoting Voyager Digital… Will the charges stick?

A class-action lawsuit against Mark Cuban and the Dallas Mavericks, the basketball team he has owned since 2022, has been filed by a group of ex-Voyager Digital customers before the Miami courts.

Plaintiffs allege that Voyager founder Stephen Ehrlich and Cuban used “their experience as investors to dupe millions of Americans into investing” into the bankrupt crypto lending platform, causing investors to lose over US$5bn in digital assets.

The lawsuit claims that Voyager was unregulated, unsustainable and acted as a classic Ponzi scheme, causing some customers to lose their life savings.

The following statement from Cuban was put forward as evidence:

“I gotta add, I am a (Voyager) customer and I’ve been a customer for several

months now. I like to use it, it’s easy, it’s cheap, it’s fast, and the pricing is actually

really good, so we find it as a perfect fit for our Mavs fans and reaching Mavs fans

of all ages.” 

Cuban also previously stated that Voyager was “as close to risk free as you’re gonna get in the crypto universe” during a press conference he joined in tandem with Ehrlich.

Voyager was one of the most high-profile crypto lenders to go bust in the recent market turmoil that saw billions in customers’ funds go missing when Celsius, Three Arrows Capital, BlockFi and a raft of smaller platforms faced a liquidity crisis in a spiralling bear market.

Influencers in the spotlight

The class action is potentially just one of many to come against so-called influencers.

High-profile internet celebrities have regularly touted NFTs and cryptocurrencies on YouTube, Twitter and other social media platforms, many turning out to be scams.

Jake Paul is among the busiest promoters of NFTs and crypto schemes, having recently been accused of earning over $2mln from lending his name to various projects, including the Safemoon and Animoons scams.

A class action filed against Safemoon in February also cites Jake Paul’s brother Logan, rapper Miles “Lil Yachty” Parks McCollum, DeAndre Cortez May (aka Soulja Boy), former Backstreet Boy Nick Carter and British YouTuber Ben Phillips as defendants.

Not even boxer Floyd Mayweather –  whose net worth is estimated to be US$450mln – can resist the urge to promote NFTs to his fans, even after being banned from promoting securities by the Securities Exchange Commission for his part in the US$25mln Centra crypto scam.

Another scam he promoted. “BoredBunny”, down 90% pic.twitter.com/G85rtIpoWe

— Coffeezilla (@coffeebreak_YT) March 22, 2022

Mayweather, alongside DJ Khaled, French Montana and naturally Jake Paul, were involved in the marketing of Bored Bunnies, an NFT collection that rug pulled investors for over US$20mln in March.

Mayweather is also being sued, alongside Kim Kardashian and former basketball star Paul Pierce, for promoting the EthereumMax scam to their millions of followers.

Crypto advertising crackdown lacks bite

The UK government is seeking to tighten laws around unauthorised financial promotions of high-risk assets, although the Financial Conduct Authority has conceded that its regulatory oversight of crypto promotions is limited.

In the US, the regulators can’t even agree on who has jurisdiction, and despite the raft of class actions, influencers have faced little to no accountability for their dubious marketing practices.

Which leads to the question: Is there any chance that Cuban will face consequences for promoting Voyager?

Perhaps, given the greater sums at stake in Voyager’s bankruptcy compared to the low-ball NFTs touted by the Pauls et al, the lawsuit could generate wider attention.