Crypto brokerage firm Voyager Digital has asked the court handling the lawsuit filed against the company, its CEO, and Mark Cuban, to halt the lawsuit against its CEO Stephen Ehrlich and the American billionaire, according to law360’s recent report.
The company filed for bankruptcy in July this year and has cited Chapter 11 to pause the lawsuit filed. Media reports pointed out that while lawsuits against companies in bankruptcy are on automatic stay, the same doesn’t apply to third parties, including a company’s executives
Recently, a group of crypto investors filed a lawsuit against Mark Cuban and the CEO of Voyager Digital, Stephen Ehrlich. The lawsuit alleges that Cuban helped lure customers to the company, contributing to investor losses of $5 billion, as he heavily promoted the cryptocurrency platform in a way that misled unsophisticated investors.
According to the complaint filed, “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—into the Deceptive Voyager Platform and purchasing Voyager Earn Program Accounts (‘EPAs’), which are unregistered securities.”
Tweets Cited To Make The Investors’ Case
The investors cited the public statements made by both, including tweets such as:
“I gotta add, I am a [Voyager] customer, and I’ve been a customer for several months now. I like to use 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.” —Mark Cuban
“In stocks and crypto, you will see companies that were sustained by cheap, easy money — but didn’t have valid business prospects — will disappear. Like [Warren] Buffett says, ‘When the tide goes out, you get to see who is swimming naked.” —Mark Cuban
“Mark is a tremendous advisor to me, and we have a great relationship. 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.” —Stephen Ehrlich
Celebrities have been shamelessly peddling crypto.
In November, Mark Cuban said that Voyager was “as close to risk free as you’re gonna get in the crypto universe.”
Voyager went bankrupt in June.
Believe me when I tell you this: They’re selling you snake oil. pic.twitter.com/aXzFTvKwRE
— Robert Reich (@RBReich) August 16, 2022
On the Flipside
- This is not the first lawsuit filed against Voyager. Investors are holding the celebrities who promoted Voyager responsible.
Why You Should Care
According to Crunchbase, the total funding of the cryptocurrency lender amounts to US$360.1 million in the crypto market.