The National Basketball Association (NBA) is facing a potential class-action lawsuit regarding its marketing partnership with Voyager Digital, a now-bankrupt cryptocurrency lender, which users allege resulted in substantial losses exceeding $4.2 billion. Filed in the Miami District Court on February 6, the lawsuit spans over 100 pages and accuses the NBA of "gross negligence" in approving Voyager's promotional deal with the Dallas Mavericks. The lawsuit scrutinizes the marketing efforts of both companies and contends that the NBA acted as a "gatekeeper" in the promotion of Voyager's services.
The plaintiffs argue that the NBA's extensive promotion of Voyager's unregistered securities renders it accountable for any resulting losses. They assert that the NBA knowingly assumed the risks associated with partnering with cryptocurrency exchanges like Voyager, Coinbase, and FTX, while benefiting from billions of dollars in promotional compensation. The lawsuit further alleges that the NBA, facing financial challenges due to the COVID-19 pandemic, disregarded concerns about Voyager's products and associated risks.
Additionally, the lawsuit implicates Voyager's law firm, McCarter & English, accusing it of issuing a misleading "legal opinion" to assuage investor and partner concerns about Voyager's products. The lawsuit claims that the law firm leveraged its credibility to falsely assert that Voyager's tokens were not unregistered securities and misrepresented the safety of Voyager's offerings. The decision to expand the lawsuit to include the NBA and McCarter & English stems from the plaintiffs' assertion that a comprehensive investigation revealed the need for broader legal action.
Voyager Digital faced financial turmoil, including the suspension of withdrawals and subsequent bankruptcy filing in July 2022, attributed to investments in the defunct cryptocurrency hedge fund Three Arrows Capital (3AC). The collapse of FTX in late 2022 also triggered multiple lawsuits against celebrities, sports figures, and organizations associated with the cryptocurrency company. Notable entities, including the Mercedes F1 Team, Major League Baseball, and prominent individuals like Tom Brady and Stephen Curry, have faced legal action over their affiliations with FTX.
