A class action lawsuit has been filed against the National Basketball Association (NBA), accusing the league of gross negligence through its marketing agreements with the now-bankrupt crypto exchange Voyager Digital Holdings, leading to investor losses of over $4.2 billion.
NBA Faces Class Action Lawsuit Over Voyager Digital Promotion
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NBA Hit With Class Action Lawsuit Over Alleged Negligent Crypto Promotions
The NBA is embroiled in a legal battle, facing a class action lawsuit over its previous marketing agreements with the now-defunct cryptocurrency exchange Voyager Digital Holdings. Investors allege these partnerships led to substantial financial losses totaling approximately $4.2 billion, following the collapse of the digital currency platform amid the volatile crypto market downturns of 2022.
Filed on Feb. 6 in a Miami district court, the lawsuit accuses the NBA of gross negligence for its role in promoting Voyager, particularly through a marketing deal with Mark Cuban’s Dallas Mavericks. The plaintiffs argue that:
The NBA carefully and deliberately decided to embrace the risks associated with cryptocurrency exchanges such as Voyager, FTX, and Coinbase, and go all in. This decision, however, led to significant legal and financial repercussions.
Leveraging the NBA’s global reputation, the league is accused of promoting and selling billions in what are claimed to be unregistered and illegal securities to the public.
This lawsuit follows on the heels of previous legal challenges, including one against Cuban for his endorsement of Voyager. Voyager’s law firm, McCarter & English, faces accusations of issuing “fraudulent legal opinions” to support the legality of Voyager’s offerings, a claim the firm denies, promising a robust defense.
Amidst these controversies, the lawsuit asserts that the NBA’s significant promotional role helped Voyager utilize the NBA’s esteemed reputation to endorse and sell what are alleged to be illegal crypto securities. This includes claims against Voyager’s legal team for claiming that the firm’s VGX token was not an unregistered security, despite the ongoing lack of formal classification for crypto assets in the United States.
Plaintiffs are seeking damages, including from the proceeds of Cuban’s recent $3.5 billion sale of the Mavericks. The suit also references the Commodity Futures Trading Commission’s legal action against Voyager co-founder Stephen Ehrlich for allegedly fraudulent operations.
Do you think the NBA is legally responsible for losses due to its marketing with Voyager? Share your thoughts and opinions about this subject in the comments section below.
