Mark Cuban Sued For Allegedly Promoting ‘Ponzi Scheme’


Dallas Mavericks owner Mark Cuban watches players warm up before an NBA basketball game starts against the Miami Heat on Friday, Feb. 28, 2020, in Miami. | Image by Wilfredo Lee, AP

A lawsuit filed earlier in August in the United States District Court for the Southern District of Florida accuses Dallas Mavericks billionaire owner Mark Cuban of misleading investors through his promotion of cryptocurrency platform Voyager Digital, which filed for bankruptcy in July.

The plaintiffs in the suit claim that Voyager was “a massive Ponzi scheme” and Cuban “duped millions of Americans into investing.”

Cuban, the Dallas Mavericks, and Voyager Digital CEO Steven Ehrlich are listed as defendants in the lawsuit. There are 12 lead plaintiffs in the case compiled by the Moskowitz Law Firm based in Coral Gables, Florida. 

The plaintiffs allege in the lawsuit that Cuban and Ehrlich “went to great lengths to use their experience as investors to dupe millions of Americans into investing — in many cases, their life savings — into the Deceptive Voyager Platform and purchasing Voyager Earn Program Accounts (‘EPAs’), which are unregistered securities.” 

“As a result, over 3.5 million Americans have now all but lost over 5 billion dollars in cryptocurrency assets,” the lawsuit claims. 

The suit describes Voyager Digital as an “unregulated and unsustainable fraud,” specifically targeting “young and inexperienced investors.” It states that Cuban and Ehrlich “personally reached out to investors, individually and through the Dallas Mavericks, to induce them to invest in the Deceptive Voyager Platform.”

In October 2021, the Mavericks announced a five-year partnership with Voyager Digital, making it the team’s first cryptocurrency brokerage and international partner.

Fans were offered a limited-time deal where if they created an account using the promo code “MAVS100,” then deposited $100 and traded at least $10 by the end of the month, they would receive a $100 reward. The influx of new users was so great that Voyager added a waitlist.

To commemorate the deal, Mark Cuban held a press conference with Ehrlich promoting the partnership and answering questions about the “official crypto partner of the Dallas Mavericks.”

“I gotta add, I am a [Voyager] customer and I’ve been a customer for several months now,” Cuban said during the press conference. “I like it: It’s easy, it’s cheap, it’s fast and the pricing is actually really good, so we find it as a perfect fit for our Mavs fans and reaching Mavs fans of all ages.”

On July 1, Voyager temporarily suspended all trading and withdrawals on its platform before filing for bankruptcy in New York on July 5, citing “prolonged volatility and contagion in the crypto markets over the past few months.”

In a July 6 press release, Voyager stated it has “approximately $1.3 billion of crypto assets” on the platform and more than $350 million in users’ cash frozen in an FBO account held by the Metropolitan Commercial Bank in New York.

The lawsuit cites Cuban’s press conference to announce the partnership, saying the Shark Tank star “strongly supported and touted the partnership between his company and the Voyager defendants.”

The plaintiffs emphasized that Cuban “proudly described how he would personally help significantly increase scope and presence of the Deceptive Voyager Platform for those with limited funds and experience.”

Included in the court filing are remarks made by Ehrlich regarding his relationship with Mark Cuban. 

“Mark [Cuban] is a tremendous advisor to me and we have a great relationship,” Ehrlich is quoted. “He is a big believer in crypto. Sometimes the value someone brings is not what the public sees but where they give you guidance and help behind the scenes.”

The plaintiffs are pursuing monetary damages and charges for aiding and abetting fraud and aiding and abetting breach of fiduciary duty against the defendants.  

Cuban has yet to comment on the lawsuit publicly and has not responded to questions from multiple news outlets about the matter. 

In a Fortune interview earlier this summer, Cuban opened up about the decline in the cryptocurrency market. 

“In stocks and crypto, you will see companies that were sustained by cheap, easy money — but didn’t have valid business prospects — will disappear,” he said. “Like [Warren] Buffett says, ‘When the tide goes out, you get to see who is swimming naked.'”

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