A new lawsuit accuses billionaire Shark Tank investor Mark Cuban of partnering with now bankrupt crypto platform Voyager Digital to dupe investors in “a massive Ponzi scheme.”
A class-action lawsuit filed on Wednesday on behalf of millions of investors alleges that 3.5 million Americans lost over $5 billion dollars in cryptocurrency assets through Voyager. It says the scheme depended on vocal and monetary support from Cuban.
Stephen Ehrlich, CEO of Voyager, and the Dallas Mavericks, the NBA team owned by Cuban, are also listed as defendants. The lawsuit says that Cuban, Ehrlich and the Mavericks should pay the victims back.
“Cuban and Ehrlich, as will be explained, went to great lengths to use their experience as investors to dupe millions of Americans into investing — in many cases, their life savings,” the lawsuit claimed.
Cuban has also never disclosed the amount of compensation he receives for promoting Voyager, the lawsuit said. Cuban did not immediately return a request for comment on the lawsuit.
The suit filed by The Moskowitz Law Firm in Miami said that Cuban and Ehlrich “personally reached out to investors, individually and through the Dallas Mavericks, to induce them to invest in the Deceptive Voyager Platform.”
Managing partner of the law firm Adam Moskowitz said in a statement that Cuban is not above the law.
“He works tirelessly to gain the trust of hundreds of thousands of consumers from across the country, that all trust and rely upon him for their investment advice,” Moskowitz said.
The Mavericks first announced a five-year exclusive partnership with Voyager in October 2021. Fans were given a limited deal where if they deposited $100 and traded at least $10 by the end of the month, they got a $100 reward. The influx of new users was so great that Voyager added a waitlist.
The partnership announcement from the Mavericks said that Voyager was a way “to earn high returns while also getting skin in the game.” It also said that it was “an attractive investment for novice investors who might only have $100 to start.”
Voyager temporarily suspended all trading and withdrawals on its platform on July 1 shortly before filing for bankruptcy in New York on July 5, listing both assets and liabilities between $1 billion and $10 billion.
Voyager Digital stock is down more than 98% over the past year to less than $1. The company’s token, VGX, is down more than 90% for the same time period.
The timing of the partnership was less than ideal. It launched last October, just weeks before digital currencies peaked in November before crashing. Since early November, the global market cap of cryptocurrencies has fallen from $2.9 trillion to $1.2 trillion.