Voyager Digital has entered bankruptcy proceedings, and as a result, Cuban is taking some of the heat from disgruntled investors.
Billionaire Mark Cuban is certainly one of the most enthusiastic advocates of cryptocurrencies. He has shown his support by accepting cryptocurrency payments for the Dallas Mavericks basketball team, which he owns.
Cuban, in his foray into the world of cryptocurrencies, has crystallized by ‘promoting’ some platforms in the past, such as Voyager Digital. However, since the cryptocurrency company has entered bankruptcy proceedings, Cuban is facing dissatisfied reactions from disgruntled investors.
Class Action Lawsuit against Mark Cuban
According to a filing in the United States District Court for the Southern District of Florida, a class action lawsuit has been filed against billionaire Mark Cuban. The filing claimed that Mark Cuban had helped the company defraud millions of Americans.
In this presentation, Cuban’s comments regarding Voyager Digital were cited. The billionaire had stated that he used the platform, and given his influence in the space, many had followed suit using the platform.
All had been going well for a while, until 2022, when the ripple effects of the LUNA event began to show; thus, Voyager Digital was caught in the crossfire. Not long after, the company filed for bankruptcy after it failed to pay out user funds.
Voyager Digital CEO Presumably Involved
Along with Mark Cuban, Stephen Ehrlich was also named in the lawsuit. Ehrlich was the CEO of the now-defunct platform and has stated in the past that they had a working relationship, saying that Cuban has been an adviser to him.
The lawsuit alleges that the significant growth of the platform was attributed to Cuban’s financial and vocal support, as well as the support of the Dallas Mavericks, who have millions of fans in the United States.
The lawsuit stated that, “Cuba’s enthusiasm for the Voyager/Mavericks partnership was shared by Steve Erhlich, CEO and co-founder of Voyager, who said the company ‘couldn’t be more excited’ to partner with the Mavs.”
Since the platform filed for bankruptcy, billions of user funds have been frozen, preventing more than 3 million US users from accessing the cryptocurrencies they had initially deposited on the platform for returns.
In fact, customers had deposited funds under the assumption that their funds were insured, but this turned out to be false.
Voyager Digital was revealed to have lent $1.6 billion to Alameda Research, which is owned by FTX CEO Sam Bankman-Fried. The trading platform reportedly owes Voyager $370 million and has been one of the companies to offer a ransom during the process.
However, the bankruptcy case continues and the only relief offered to users so far is an announcement that users who had dollars in their accounts would have a daily withdrawal limit of $100,000 starting August 11. The catch is that the funds will be processed within 5-10 business days.
By Audy Castaneda