Voyager investors sue Mark Cuban over ‘scheme’

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Billionaire Mark Cuban is being sued over allegations he misled investors into investing money in now-bankrupt crypto lender Voyager Digital, a class action lawsuit filed in Miami States, calling the platform a “massive Ponzi scheme”.

“The Deceptive Voyager platform is based on false pretenses, misrepresentations and is specifically designed to take advantage of investors who use mobile applications to make their investments in an unfair, disreputable and misleading manner,” the complaint from 92 pages against Cuba and co-defendant Stephen Ehrlich, the founder and CEO of Voyager, alleges.

Additionally, the lawsuit describes the saga that ultimately cost investors an estimated $5 billion as “a house of cards, built on false promises and factually impossible representations that were specifically designed to capitalize on the craze for cryptocurrency to the direct detriment of any ordinary investor”. .”

In response to the request for a response emailed by PYMNTS to Cuban’s Dallas office, Scott Tomlin, vice president of basketball communications for the Dallas Mavericks, said the team had no comment.

For its part, Voyager filed for bankruptcy in July as one of the biggest casualties to emerge from the 6-month slump in bitcoin and cryptocurrency markets that has wiped out an estimated $2 trillion valuation since November. last, when the market peaked.

Voyager’s problems stem from a $650 million loan it made to Three Arrows Capital, which defaulted on a loan in June and was then forced into liquidation and suspend deposits and withdrawals, leaving him unable to repay the debt.

After Voyager filed for its own bankruptcy protection in July, a New York bankruptcy judge last week ruled that Voyager could return $270 million in cash to its customers from crypto and other assets. assets that are now blocked in court.

Read more: Bankruptcy court rules Voyager Digital can return $270 million to customers

According to the report, Voyager told the court that it had $1.3 billion in crypto assets on its platform, as well as an additional $350 million at the bank where it held the deposits and $110 million dollars in its own cash and crypto assets.

Before that, the Federal Deposit Insurance Corporation (FDIC) issued a stern warning to Voyager in late July telling the crypto platform to stop “making false or misleading statements” to its customers that their funds were FDIC insured.

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