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NBA in Legal Battle Over Crypto Marketing

News | Feb 8, 2024

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NBA Faces Lawsuit for Alleged Negligence in Crypto Exchange Marketing Deals

The National Basketball Association (NBA) is currently embroiled in a significant legal challenge, accused of "gross negligence" for its marketing affiliations with the now-defunct crypto exchange Voyager Digital Holdings Inc.

  • Investors have filed a lawsuit against the NBA, claiming the association was "grossly negligent" in its marketing agreement with Voyager Digital Holdings Inc., facilitated by Mark Cuban, the then-owner of the Dallas Mavericks.
  • This partnership, formalized through a five-year deal making Voyager's token the official cryptocurrency of the Mavericks, is blamed for leading investors into what is described as "an unregulated and unsustainable fraud," culminating in $4.2 billion in losses.  The situation was further complicated when Voyager filed for Chapter 11 protection from creditors in 2022, leading to a court-authorized liquidation of assets to repay a portion of the crypto held on its platform to customers.

See:  Kim Kardashian Pays $1.26M to the SEC in Penalties for Unlawfully Touting Crypto

  • In 2022, Mark Cuban faced legal action for his promotion of Voyager's offerings. The lawsuit accused him of endorsing Voyager's products, specifically the platform's Voyager Earn Program Accounts (EPAs), as viable investments, despite allegations that he was aware these were "unregistered securities."
  • The lawsuit not only targets the NBA but also implicates Voyager's legal advisors, McCarter & English, accusing them of producing fraudulent legal opinions that contributed to the alleged conspiracy. This highlights the broader implications of the case, affecting various stakeholders within the crypto and legal sectors.
  • The collapse of Voyager and similar crypto entities like FTX has spotlighted the influence of celebrity endorsements in the crypto market. High-profile figures, including sports stars and entertainers, have faced lawsuits for their promotional activities, emphasizing the legal risks associated with celebrity-driven marketing in high-risk financial products.

Why It's Important

This legal battle may set a precedent for how sports organizations approach partnerships with financial and tech companies, especially in emerging and volatile markets like cryptocurrency.

See:  FTX Fallout: Stephen Curry and Tom Brady Reportedly Under Investigation in Texas

This case could prompt stricter scrutiny and regulations on sports organizations' marketing deals, especially those involving financial products, to protect investors and maintain the integrity of the sports industry.


NCFA Jan 2018 resize - NBA in Legal Battle Over Crypto MarketingThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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