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A group of investors has filed a lawsuit against the NBA, linking it to the collapsed cryptocurrency trading platform Voyager Digital.
The legal action alleges that the NBA's involvement in a promotional agreement with Voyager Digital was negligent and reckless.
Allegations of Negligence and Recklessness
The lawsuit accuses the NBA of acting " grossly negligently " by approving a multi-year marketing deal between Voyager Digital and Mark Cuban, the owner of the Dallas Mavericks.
Investors claim that the NBA's enthusiastic cryptocurrency promotion lacked consideration for the associated risks. This legal action follows Voyager Digital's bankruptcy filing, with the platform owing $4.2 billion to its customers.
The lawsuit contends that the NBA's endorsement of Voyager's platform amounted to promoting "unregistered securities," echoing similar lawsuits against celebrities who endorsed crypto projects. It comes at a time when financial regulators, investors, and fraud victims are grappling with the aftermath of the recent crypto market crash, which led to the downfall of firms like Voyager and FTX.
NBA's Alleged Role in Crypto Promotion
The investors' complaint specifically targets the NBA, a major sports organization that has entered into sponsorship and naming rights agreements with various crypto entities in recent years.
According to Bloomberg, it alleges that the NBA aimed to solidify its position in digital asset promotion by endorsing Voyager Digital despite the known risks. The lawsuit claims that the NBA facilitated a partnership between Voyager and the Dallas Mavericks, intending to introduce Voyager's platform to basketball fans.
According to the lawsuit, the NBA's extensive promotion of Voyager's unregistered securities makes it liable for any resulting damages. The legal filing also accuses the law firm McCarter & English of producing fraudulent legal opinions supporting the NBA's actions.
Crypto Fallout Continues
The NBA joins a growing list of entities facing legal repercussions after the crypto market collapse.
According to Milk Road, celebrities such as Larry David, Kim Kardashian, and Tom Brady also face lawsuits for promoting crypto projects like FTX before their collapse.
These legal actions highlight the lingering impact of the collapse of significant crypto players on numerous customers and stakeholders.
Photo: Markus Spiske/Unsplash
