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The millionaire crypto investor Mark Cuban lost all of his money when his business dealings with Voyager Digital collapsed in early July. Many were saying that he should have expected it. After the company filed for bankruptcy, the billionaire owner has then been flooded with online criticism.
On July 8th, it was noted that his critics say they’ve lost money due to his support of the site. A class action lawsuit was brought against the successful businessman as a result of these complaints.
Unlike other crypto platforms such as Bitcoin online casino which have remained stable despite the crypto meltdown, Voyager Digital was unable to do the same and succumbed to the market pressure.
Their complaint alleges that Cuban and the Dallas Mavericks tricked them into investing in Voyager Digital, which ultimately failed and lost the investors a total of $5 billion. In this case, the complaint stems from a similar one lodged in December, also directed against Voyager Digital.
The plaintiff said, ‘Cuban and Ehrlich, went to great lengths to use their experience as investors to dupe millions of Americans into investing. In many cases, their life savings into the deceptive Voyager platform and purchasing Voyager earn programme accounts (EPAs), which are unregistered securities Due to this, the 3.5 million Americans have lost over $5 billion in crypto assets’.
The plaintiffs are principally relying on Cuban and Ehrlich’s statements made during the signing of the partnership between the Dallas Mavericks and Voyager Digital to demand payment from them.
The case is unlikely to go to trial because a court must first rule that the 12 plaintiffs in the complaint are typical of the 3.5 million Americans who would have been impacted by Voyager Digital’s failures.
Voyager customer desperate to regain funds after losing $1 million
During Voyager Digital’s five-hour Chapter 11 bankruptcy hearing earlier this month, Magnolia was the first user to testify.
To protect her identity, Magnolia only used her first name, but she claimed to have almost $1 million stuck on the platform. This includes $350,000 intended for her children’s college expenses. She stated it took her 24 years to save enough money and that she had to forego time with her own children in the process.
‘I absolutely feel like we’re paying the ultimate price’, Magnolia said. ‘They abused our faith and stole our money since they were unable to operate the company efficiently’.
Magnolia was perplexed as to why Voyager continued to borrow money rather than reduce spending in light of the company’s declining financial situation. She also inquired as to whether or not CEO Stephen Ehrlich was still being paid and receiving a bonus.
More than a month after Voyager halted trading and soon after filed for Chapter 11 bankruptcy, the company’s 3.5 million clients, including Magnolia, are still waiting for answers. Voyager, a once-prominent lending platform, attracted retail investors by promising them returns of up to 10% per year on their tokens.
Hedge funds and crypto sites with high exposure to digital assets faced a liquidity crisis in 2022 as crypto prices crashed. Many believe that this is widely caused by the Federal Reserve rate hikes and investor rotation out of the riskiest assets. Falling back on loans was a widespread problem at many of these companies, which in turn impacted larger businesses and lenders like Voyager.
Despite some successful crypto platforms such as the Bitcoin online casino standing their ground, many crypto industries have found themselves in a tight spot ever since the crypto crash. Now, more crypto companies are filing for bankruptcy which has left many people wondering if the digital asset can bounce back.
Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.
