Crypto evangelist Mark Cuban is in trouble due to bankruptcy
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Millionaire crypto investor Mark Cuban lost all his money when his business dealings with Voyager Digital collapsed in early July. Many said he should have expected it. After the company filed for bankruptcy, the billionaire owner has been inundated with online criticism.
On July 8, it was noted that his critics say they have lost money because of his support for the site. A class action lawsuit was filed against the successful businessman as a result of these complaints.
Unlike other crypto platforms such as Bitcoin online casino that have remained stable despite the crypto meltdown, Voyager Digital failed to do the same and succumbed to market pressure.
Their complaint alleges that Cuban and the Dallas Mavericks tricked them into investing in Voyager Digital, which ultimately failed and lost investors a total of $5 billion. In this case, the complaint stems from a similar complaint filed in December, also against Voyager Digital.
The plaintiff said: “Cuban and Ehrlich went to great lengths to use their experience as investors to deceive millions of Americans into investing. In many cases, their life savings go toward the deceptive Voyager platform and the purchase of Voyager Program Accounts (EPAs), which are unregistered securities. Because of this, the 3.5 million Americans have lost over $5 billion in crypto assets.”
The plaintiffs rely primarily on Cuban and Ehrlich’s statements made during the signing of the partnership between the Dallas Mavericks and Voyager Digital to seek payment from them.
The case is unlikely to go to trial because a court must first determine that the 12 plaintiffs in the complaint are typical of the 3.5 million Americans who would have been affected by Voyager Digital’s failure.
Voyager customer desperate to get money back after losing $1 million
During Voyager Digital’s five-hour Chapter 11 bankruptcy hearing earlier this month, Magnolia was the first user to testify.
To protect her identity, Magnolia only used her first name, but she claimed to have nearly $1 million tied up on the platform. This includes $350,000 earmarked for the children’s college expenses. She said it took her 24 years to save enough money and that she had to give up time with her own children in the process.
“I definitely feel like we’re paying the ultimate price,” Magnolia said. “They abused our trust and stole our money since they were unable to run the company effectively.”
Magnolia was confused as to why Voyager continued to borrow money instead of reducing spending in light of the company’s declining financial situation. She also asked if CEO Stephen Ehrlich was still being paid and received a bonus.
More than a month after Voyager ceased trading and shortly after filed for Chapter 11 bankruptcy, the company’s 3.5 million customers, including Magnolia, are still waiting for answers. Voyager, a once-prominent lending platform, attracted retail investors by promising them returns of up to 10% per year on tokens.
Hedge funds and crypto sites with high exposure to digital assets faced a liquidity crisis in 2022 when crypto prices crashed. Many believe that this is largely caused by Federal Reserve interest rate hikes and investor rotation out of the riskiest assets. Falling back on loans was a widespread problem in many of these companies, which in turn affected larger businesses and lenders like Voyager.
Despite the existence of some successful crypto platforms such as the Bitcoin online casino, many crypto industries have found themselves in a tight spot since the crypto crash. Now several crypto companies are filing for bankruptcy, which has made many wonder if the digital asset can bounce back.
