Billionaire Investor Mark Cuban Wins Dismissal In Crypto Lawsuit Over Voyager Digital Collapse

Mark Cuban And Dallas Mavericks Win Dismissal In Voyager Digital Crypto Lawsuit

Billionaire Mark Cuban has successfully dodged a class-action lawsuit tied to the collapse of cryptocurrency lender Voyager Digital, after a federal judge ruled that Florida courts lacked jurisdiction over him and his NBA team, the Dallas Mavericks.

Why The Lawsuit Was Filed

The legal action, initially filed in August 2022, involved investors in Voyager Digital who lost money after the crypto firm went bankrupt in July 2022.

The plaintiffs claimed Cuban and the Mavericks misled retail investors by promoting Voyager through public endorsements and marketing campaigns in 2021, including a news conference where Cuban said he had personally invested in the platform.

The promotion included a campaign offering $100 in Bitcoin to new users who downloaded the Voyager app, opened an account, deposited $100, and completed a trade.

Plaintiffs argued these incentives encouraged people to invest under false assumptions about the safety of the platform, which ultimately collapsed as part of the broader crypto downturn that year.

Court Finds Florida Lacks Jurisdiction

Judge Roy K. Altman of the United States District Court for the Southern District of Florida dismissed the case, stating that the plaintiffs had “failed to establish personal jurisdiction” over Cuban and the Mavericks.

The court noted that Cuban’s visits to Miami Beach and property ownership in Florida were insufficient to show he or his team “carried on a business or business venture in Florida.”

The ruling also highlighted that the plaintiffs could not demonstrate that Florida residents were specifically targeted in Voyager promotions.

Altman wrote,

“Invoking conspiracy jurisdiction here might make more sense if this suit were against Voyager. But it’s not. Cuban and the Mavericks are our sole defendants. And the Plaintiffs don’t argue that Voyager is the relevant co-conspirator here.”

Cuban’s Defence And Court Observations

Cuban’s legal team argued that he had no control over Voyager and had consistently warned investors about crypto risks.

Judge Altman agreed that nationwide promotions do not automatically equate to targeting Florida residents under the state’s long-arm statute or constitutional due-process standards.

The case was dismissed without prejudice, meaning the plaintiffs could attempt to refile in another jurisdiction, though the Florida court barred them from proceeding there.

Steve Best, lead counsel for Cuban and the Mavericks, said the outcome was “the absolute right result” and emphasised that Cuban “doesn’t settle when he believes he is on the right side of the law.”

Cuban has since sold his majority stake in the Mavericks to casino magnate Miriam Adelson.

Wider Implications For Celebrity Crypto Promotions

Voyager Digital, which managed over $5 billion in assets and served nearly 3.5 million investors at its peak in 2021, filed for Chapter 11 bankruptcy after suffering massive losses from risky lending practices during the 2022 crypto crash.

In October 2023, the Federal Trade Commission permanently barred Voyager from handling consumer assets and sued its former CEO, Stephen Ehrlich, for falsely claiming customer accounts were insured by the FDIC.

This case forms part of a wider wave of litigation against celebrities, athletes, and sports teams accused of promoting failed crypto platforms.

The ruling emphasises that simply endorsing a crypto platform does not expose promoters to liability unless they intentionally target specific residents and mislead them, providing clearer boundaries for celebrity endorsements in the cryptocurrency sector.