The National Basketball Association (NBA) faces legal action for its endorsement of now-defunct crypto exchange Voyager Digital Holdings, which investors claim resulted in losses exceeding $4.2 billion.
The lawsuit, filed in a Miami district court on Tuesday, alleges that the NBA demonstrated “gross negligence” by approving a marketing agreement between Voyager and the Dallas Mavericks. According to the complaint, the NBA’s extensive promotion of Voyager’s unregistered securities makes it accountable for any resulting financial losses.
The legal action also implicates Voyager’s law firm, McCarter & English, accusing it of leveraging its reputation to reassure investors that Voyager’s offerings were legitimate.
This lawsuit follows a previous legal challenge in 2022 against Mark Cuban, the former owner of the Mavericks, with similar claims of deception regarding Voyager. Cuban has refuted these allegations.
Voyager filed for bankruptcy in July 2022 due to its ties with the failed crypto hedge fund Three Arrows Capital.
Requests for comment from the NBA and McCarter & English have yet to be answered.