The National Basketball Association (NBA) is being sued in a class-action lawsuit because of its advertising agreements with the now-failed cryptocurrency lending company Voyager Digital. Users of Voyager say these deals led to them losing more than $4.2 billion.
Filed in a Miami court on February 6, the lawsuit spans over 100 pages and accuses the NBA of being “grossly negligent” by allowing Voyager to promote itself in partnership with the Dallas Mavericks. The lawsuit argues that the NBA was supposed to act as a responsible “gatekeeper” in these marketing efforts.
The people suing claim, “This lawsuit aims to make the NBA responsible for the losses. Because the NBA heavily promoted Voyager’s unregistered securities, it should be liable for all the resulting damages.”
They also say the NBA knowingly took risks by partnering with cryptocurrency exchanges like Voyager, Coinbase, and FTX and accepted “billions in promotional compensation.” This was when the NBA lost a lot of money due to COVID-19, with empty arenas and significant drops in television revenue.
The law firm representing Voyager, McCarter & English, is also mentioned in the lawsuit. The firm is accused of providing a misleading “Legal Opinion” that suggested Voyager’s token was not an unregistered security to ease potential investors’ and partners’ concerns about Voyager’s legitimacy.
In 2022, the same group suing the NBA had also sued Mark Cuban, the former owner of the Dallas Mavericks, for endorsing Voyager and misleading people about its safety, which Cuban has denied. The lawsuit’s “extensive discovery” process has widened the legal action to include the NBA and McCarter & English.
Voyager stopped allowing withdrawals in early July 2022 and declared bankruptcy later that month because it was financially hurt by the collapse of the cryptocurrency hedge fund Three Arrows Capital (3AC).
Following the collapse of another crypto firm, FTX, in late 2022, several lawsuits have been launched against celebrities, sports stars, and sports organizations that had partnerships with cryptocurrency companies.
The Mercedes F1 Team, Major League Baseball, NFL star Tom Brady, NBA player Steph Curry, basketball analyst Shaquille O’Neal, comedian Larry David, and others have faced lawsuits for their associations with FTX.
Neither the NBA nor McCarter & English have responded to requests for comments on the lawsuit.
