Arrow-right Camera
The Spokesman-Review Newspaper

The Spokesman-Review Newspaper The Spokesman-Review

Spokane, Washington  Est. May 19, 1883
Partly Cloudy Day 65° Partly Cloudy
News >  Nation/World

Lawsuit accuses Mark Cuban of duping investors with crypto ‘Ponzi scheme’

Aug. 11, 2022 Updated Thu., Aug. 11, 2022 at 12:52 p.m.

Dallas Mavericks owner Mark Cuban has experience dealing with the Securities and Exchange Commission on insider trading. He is concerned that the registration rules the SEC may create for digital tokens may be a "nightmare."   (Ashley Landis/The Dallas Morning News/TNS)
Dallas Mavericks owner Mark Cuban has experience dealing with the Securities and Exchange Commission on insider trading. He is concerned that the registration rules the SEC may create for digital tokens may be a "nightmare."  (Ashley Landis/The Dallas Morning News/TNS)
By Natalie Walters The Dallas Morning News

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 did not immediately return a request for comment on the lawsuit.

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.

The Spokesman-Review Newspaper

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.

Active Person

Subscribe now to get breaking news alerts in your email inbox

Get breaking news delivered to your inbox as it happens.