NBA Sued for Alleged Role in Voyager Digital Losses

A group of dissatisfied Voyager Digital investors have filed a lawsuit against the NBA for its suspected involvement in the losses they incurred as a result of the platform's closure.

Investors of Voyager Digital are suing the NBA for endorsing a crypto lender that ultimately failed.

The NBA has found itself in hot water as a group of disgruntled Voyager Digital investors files a lawsuit against the organization. The investors claim that the NBA’s approval of a promotional deal between Voyager Digital and the Dallas Mavericks, as well as its widespread promotion of Voyager’s unregistered securities, led to losses amounting to over $4.2 billion. The lawsuit alleges that the NBA exhibited gross negligence and should be held accountable for the damages suffered by investors.

NBA’s Risky Move in the Crypto Space

In an attempt to mitigate the substantial financial losses caused by the Covid-19 pandemic, the NBA decided to take a gamble by embracing the risks of working with cryptocurrency firms like Voyager Digital. According to the lawsuit, the NBA consciously chose to partner with crypto firms for the sake of “billions in promotional compensation,” disregarding the potential consequences and the security risks associated with unregistered securities.

Law Firm Accused of Issuing Bogus Legal Opinion

Not only is the NBA under fire, but Voyager Digital’s law firm, McCarter & English, is also named in the lawsuit. Investors allege that the law firm issued a fake “legal opinion” claiming that Voyager’s native utility token, Voyager Token (VGX), was not an unregistered security. This allegedly false assurance misguided potential investors and partners, leading them to believe that Voyager’s offerings were legitimate and above board.

The Domino Effect of Lawsuits

This lawsuit is not the first of its kind. Previously, disgruntled investors filed a suit against former Dallas Mavericks owner Mark Cuban for promoting what they called “an unregulated and unsustainable fraud.” Mark Cuban had entered a five-year deal with Voyager, making VGX the Mavericks’ official cryptocurrency and endorsing the platform through advertisements in the team’s arena. The investors contend that Cuban misrepresented the safety of Voyager, allegations that he vehemently denies.

• 🚀 XRP Price Surges 2% as Whales Bet on a Bullish Rebound 🐳
• The Future of the Metaverse: Centralization, Decentralization, and Regulation
• Cardano Price Soaring: Is ADA on the Verge of a New High?

McCarter & English and NBA Share Responsibility

The February 6 filing asserts that the extensive discovery in the Mark Cuban case revealed that both the NBA and McCarter & English should be held responsible for the $4.2 billion in damages caused by the collapse of Voyager’s crypto exchange. However, McCarter & English has vehemently denied these allegations and has vowed to vigorously defend itself against the claims made.

Fallout for Voyager Digital

In the wake of the controversy and mounting legal troubles, Voyager Digital was forced to pause withdrawals and file for Chapter 11 bankruptcy. The company cited its exposure to the defunct crypto hedge fund Three Arrows Capital (3AC) as a contributing factor. A court subsequently authorized the liquidation of Voyager’s assets to repay the aggrieved investors.

The Broader Implications in the Sporting World

The implosion of crypto firms like 3AC, FTX, and Voyager has had far-reaching consequences. Several celebrities, athletes, and sporting organizations have been hit with lawsuits due to their endorsement and promotion of these platforms. Alongside the NBA, the Mercedes F1 Team, Major League Baseball, football star Tom Brady, NBA star Steph Curry, basketball commentator Shaquille O’Neal, comedian Larry David, and others have all faced legal action for their involvement in promoting these now-defunct crypto platforms.

Q&A Content

Q: What were the losses suffered by investors in Voyager Digital?

A: The losses suffered by investors in Voyager Digital amounted to over $4.2 billion.

Q: What role did the NBA play in the losses?

A: The NBA approved a promotional deal between Voyager Digital and the Dallas Mavericks and promoted Voyager’s unregistered securities, which allegedly contributed to the losses incurred by investors.

Q: What is the allegation against McCarter & English?

A: McCarter & English is accused of issuing a bogus legal opinion claiming that Voyager’s native utility token, Voyager Token (VGX), was not an unregistered security, misleading potential investors and partners.

Q: What were the consequences for Voyager Digital?

A: Voyager Digital had to pause withdrawals and filed for Chapter 11 bankruptcy. The company’s assets were subsequently liquidated to repay the affected investors.

Q: Who else has faced lawsuits related to crypto firm implosions?

A: Alongside the NBA, the Mercedes F1 Team, Major League Baseball, Tom Brady, Steph Curry, Shaquille O’Neal, Larry David, and others have been sued for their involvement in promoting these defunct crypto platforms.

The Future of Crypto and the Sporting World

Given the recent lawsuits and the increased scrutiny of the cryptocurrency industry, it is likely that regulations and compliance measures will be tightened. Consequently, endorsement deals and partnerships between sporting organizations and crypto firms may become more complex and require additional due diligence.

Investors and sporting entities should closely monitor these developments and ensure they have a thorough understanding of the legal and regulatory implications before entering into such arrangements. While cryptocurrencies continue to disrupt traditional financial systems, it is essential to navigate this evolving landscape with caution and expertise.

References

1. Link title 1
2. Link title 2
3. Link title 3
4. Link title 4
5. Link title 5

We will continue to update Blocking; if you have any questions or suggestions, please contact us!