Cuban was deposed as part of a class-action lawsuit accusing him of promoting a “Ponzi scheme” in Voyager Digital.
DALLAS – Dallas Mavericks owner Mark Cuban will be questioned next month in depositions in a class action lawsuit against now bankrupt cryptocurrency lender Voyager Digital, alleging the company was “an unregulated and unsustainable fraud “.
The filed complaint alleges that Stephen Ehrlich, CEO and co-founder of Cuban and Voyager, personally reached out to investors, both individually and through the 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 get millions of Americans to invest – in many cases, their life savings – in the deceptive Voyager platform and buy Voyager program accounts Earn (“EPA”), which are unregistered securities,” the complaint reads.
The lawsuit alleges that more than 3.5 million people have lost more than $5 billion in cryptocurrency assets to the platform, with plans to hold Ehrlich, Cuban and the Dallas Mavericks accountable for repaying them.
Voyager was a multi-billion dollar mobile application that placed trade orders for cryptocurrencies. The lawsuit alleges it allegedly targeted young and inexperienced investors new to cryptocurrency trading, promising interest payments on cryptocurrency holdings and that they would receive the best possible price on cryptocurrency trades.
But the lawsuit alleges that Voyagers’ statements and representations were false, misleading, and violated several state and federal consumer statutes.
“The Deceptive Voyager platform is based on false pretenses, false representations and is specifically designed to take advantage of investors who use mobile apps to make their investments in an unfair, objectionable and deceptive manner,” the complaint reads. “Simply put, the plaintiffs will prove that the deceptive platform Voyager is a house of cards, built on false promises and impossible representations of fact that have been specifically designed to take advantage of the cryptocurrency craze at the direct expense of any ordinary investor.”
The lawsuit goes on to claim that Voyager’s defendants never disclosed that they intentionally set the price on their platform high enough to collect exorbitant hidden fees on every cryptocurrency exchange, despite claiming to be “100% commission free.”
Cuban was cited in the complaint as strongly advocating and publicizing his partnership with Voyager at a recent Dallas Mavericks press conference, where he described how it would help increase Voyager’s reach and presence.
“To put it simply: There is untapped potential in the future of digital currencies and it’s an attractive investment for novice investors who may only have $100 to get started,” Cuban said at the time, according to court documents. “This is where Voyager comes into the picture.”
While 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 failure to disclose this information would violate the anti-touting provisions of the federal securities laws.
Cuban previously called Voyager “as close to risky as it gets in the cryptocurrency universe,” the complaint claims, and once arranged a press conference with Ehrlich where New York Knick Jalen Brunson, a Maverick at the time, said asked “”If this is my first time into the world of cryptocurrencies, what are some key things I need to know?”
“[T]The deceptive Voyager platform was a massive Ponzi scheme and relied on vocal support from Cuban and the Dallas Maverick and monetary investment from Cuban to continue sustaining itself until its implosion and Voyager’s subsequent bankruptcy,” the lawsuit alleges.
Cuban requested that his deposition be split into two sessions, but a judge denied his request and his full deposition will be taken on February 2.
WFAA reached out to Cuban for comment and received no response.