Cuban was fired as part of a class-action lawsuit accusing him of promoting a “Ponzi scheme” at Voyager Digital.
DALLAS – Dallas Mavericks owner Mark Cuban will face questioning next month as part of a deposition in a class-action lawsuit against now-bankrupt cryptocurrency lender Voyager Digital, claiming the company is an “unregulated and unsustainable fraud.”
The lawsuit filed alleges that Cuban and Voyager CEO and co-founder Stephen Ehrlich personally approached investors, both individually and through Mavericks, to get them to invest in the company.
“Cuban and Ehrlich, as will be explained, went to great lengths to use their experience as investors to deceive millions of Americans into investing – in many cases, their life savings – in the Deceptive Voyager Platform and purchasing Voyager Earn Program Accounts (“EPA- these “), which are unregistered securities”, the complaint states.
The lawsuit alleges that more than 3.5 million people have lost more than $5 billion in cryptocurrency assets as a result of the platform, and the lawsuit intends to hold Ehrlich, Cuban and the Dallas Mavericks responsible for compensating them.
Voyager was a multi-billion dollar mobile app that sent cryptocurrency trading orders. The lawsuit alleges that they will target young, inexperienced investors who are new to cryptocurrency trading, promising interest payments on cryptocurrency holdings and getting the best possible price for cryptocurrency trading.
But the lawsuit alleges Voyagers’ statements and representations were false, misleading and violated several state and federal consumer laws.
“The Deceptive Voyager platform is based on false pretenses, misrepresentations and is specifically designed to exploit investors using mobile investment applications in a dishonest, unpleasant and deceptive manner,” the complaint said. “Simply put, plaintiffs will prove that the Deceptive Voyager Platform is a house of cards, built on false promises and factually impossible presentations specifically designed to capitalize on the cryptocurrency craze to the direct detriment of any ordinary investor.”
The lawsuit further alleges that the Voyager defendants never disclosed that they intentionally set the prices on their platform high enough to collect exorbitant hidden commissions on every cryptocurrency trade, despite claiming to be “100% commission-free.”
Cuban is cited in the complaint as strongly supporting and touting his partnership with Voyager at a recent Dallas Mavericks press conference, where he described how he would help increase Voyager’s reach and presence.
“Simply put: there is untapped potential in the future of digital currencies, and it’s an attractive investment for novice investors who may have as little as $100 to start,” Cuban said at the time, according to court documents. “That’s where Voyager comes in.”
Although Cuban disclosed the partnership between Voyager and the Dallas Mavericks, the lawsuit alleges that he never disclosed the extent of the relationship and how much he was personally paid to promote Voyager, which the SEC said would have violated anti-advertising provisions of federal securities laws.
Cuban previously called Voyager “as close to risk-free as you can get in the crypto space,” according to the complaint, and once held a press conference with Ehrlich in which New York Knick Jalen Brunson, a Maverick at the time, asked “”If I this is my first time getting into crypto, what are the key things I need to know?”
“[T]”The Deceptive Voyager platform was a massive Ponzi scheme and relied on Cuban and Dallas Maverick’s vocal support and Cuban’s cash investments to continue to sustain itself until its implosion and Voyager’s subsequent bankruptcy,” the lawsuit states.
Cuban asked that his statement be split into two sessions, but the judge denied his request, and his full statement will be taken on February 2.
WFAA reached out to Cuban for comment and did not receive a response.