A group of disgruntled investors in the now-collapsed crypto lender Voyager Digital has launched a proposed class-action lawsuit against the National Basketball Association (NBA), North America’s premier basketball league. The investors allege that the NBA’s marketing deals with the crypto platform were implicit and contributed to substantial losses exceeding $4.2 billion. Filed on February 6 in a Miami district court, the over 100-page lawsuit claims that the NBA’s approval of Voyager’s promotional deal with the Dallas Mavericks exhibited “gross negligence” and positions the league as potentially liable for the financial setbacks suffered by overzealous investors.
The legal case argues that the NBA was anticipated to serve as a “gatekeeper” by approving Voyager’s promotional initiatives. The litigants argue that the NBA’s substantial promotion of Voyager’s unregistered securities implicates the league in the resulting financial losses. The legal action forms part of a broader initiative among investors seeking redress for their losses incurred on the Voyager platform. Specifically, those pursuing legal recourse contend that the NBA’s involvement in promotional activities with the crypto lender played a pivotal role in shaping their investment decisions, leading to significant financial consequences.
Allegations of gross negligence and complicity
At the core of the legal action is the assertion that the NBA displayed “gross negligence” when endorsing the marketing alliance between Voyager and the Dallas Mavericks. The lawsuit carefully outlines the collaborative promotional efforts between the two parties and contends that the NBA was obligated to thoroughly investigate such partnerships. The plaintiffs argue that the NBA’s neglect in meeting the obligation has led to significant financial setbacks for investors associated with the crypto lender.
Additionally, the lawsuit contends that the NBA knowingly embraced the risks associated with working with crypto exchanges, like Coinbase, and FTX. The litigants argue that, in light of challenges such as empty arenas and the loss of television revenues due to COVID-19, the NBA deliberately chose to partner with crypto exchanges, accepting substantial promotional compensation. The decision, as per the lawsuit, demonstrates the NBA’s complicity in the potential fallout from such partnerships.
Legal allegations extend to Voyager’s law firm
The legal action doesn’t stop at the NBA; Voyager’s law firm, McCarter & English, also finds itself entangled in the lawsuit. The filing alleges that the law firm, leveraging its credibility, issued a “bogus ‘Legal Opinion'” asserting that Voyager’s token was not an unregistered security. The plaintiffs argue that the opinion was misleading and aimed at calming the concerns of potential investors and partners, creating an illusion that Voyager’s offerings were entirely above board.
The development comes after the same group of investors had previously filed a lawsuit against Mark Cuban, the former owner of the Dallas Mavericks, in 2022. The suit alleged that Cuban had promoted Voyager, misrepresenting its safety, a claim he denies. The ongoing legal battle and “extensive discovery” prompted the investors to expand their litigation to include the NBA and McCarter & English in light of their perceived roles in the Voyager debacle.
Conclusion
The NBA is currently entangled in a legal whirlwind, with investors pursuing accountability for significant losses tied to the defunct crypto lender Voyager Digital. The class-action lawsuit asserts claims of negligence and complicity against the NBA, suggesting its approval of marketing agreements possibly played a role in Voyager’s demise. As the legal process develops, the resulting verdict could establish a precedent for the obligations of major sports organizations when engaging in partnerships with cryptocurrency entities. It may further influence the dynamic landscape of crypto regulation and accountability within the realm of sports.
