Crypto investors sued shark tank icon Mark Cuban over Ponzi scheme.
A group of crypto investors has filed a class-action lawsuit against billionaire investor and Shark Tank icon Mark Cuban, along with his basketball team the Dallas Mavericks, for promoting crypto platform Voyager Digital that went bankrupt, resulting in billions of dollars in loss for its customers.
Leading cryptocurrency broker Voyager Digital declared bankruptcy in the US last month, costing more than 3.5 million investors a combined loss of $5 billion.
According to Techcrunch, the class-action lawsuit filed in federal court in Florida also names Voyager Digital's CEO Stephen Ehrlich as a defendant.
The plaintiffs have described Voyager as "an unregulated and unsustainable fraud, similar to other Ponzi schemes".
The lawsuit alleged that "Cuban and Ehrlich personally reached out to investors both individually and through a partnership with the Dallas Mavericks, to encourage them to invest with the platform".
Voyager Digital has substantial holdings in the Singapore-based hedge fund Three Arrows Capital (3AC), which defaulted on a loan for $15,250 in Bitcoins and $350 million in USDCs, for a total debt of more than $650 million.
Voyager suspended all trading, deposits, withdrawals, and loyalty rewards on its platform before filing for bankruptcy.
The Dallas Mavericks launched their exclusive, five-year partnership with Voyager in October 2021, giving fans cash rewards for making trades on the platform.
According to the lawsuit, Cuban promoted the company "as a Voyager customer himself, in a ploy to dupe investors into believing that Voyager was a safe platform".
Mark Cuban and the Mavericks are yet to comment on the lawsuit.
Voyager has said it was actively pursuing all available remedies for recovery from 3AC.
It had approximately $1.3 billion of crypto assets on the platform and more than $350 million of cash for customers.
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