Mark Cuban

Mark Cuban to face questioning under oath over promotion of Voyager

U.S. Magistrate Judge Lisette M. Reid rejected Cuban’s application to delay the deposition, and outlined that his full deposition will be taken on Feb. 2 in Dallas, Texas.

Dallas Mavericks owner Mark Cuban is set to be deposed next month as part of a defense against a proposed class-action lawsuit alleging that he promoted a Ponzi scheme” in the form of now-bankrupted crypto lender Voyager Digital.

A deposition in legal terms generally involves answering a line of questioning under oath during the pre-trial discovery stage of a potential court case.

In a Jan. 9 court order, U.S. Magistrate Judge Lisette M. Reid denied Cuban’s request to split the deposition into two sessions and ordered that his full deposition would be taken on Feb. 2 in Dallas, Texas.

As part of the defense, two Dallas Mavericks employees will also be deposed before Feb. 23.

Additionally, the judge stated that three plaintiffs behind the suit — Pierce Robertson, Rachel Gold and Sanford Gold — will be deposed before the end of this month.

In a rather feisty statement to legal news publication Law360 on Jan. 9, the plaintiffs’ counsel expressed their enthusiasm over the judge “denying Mark Cuban’s attempts to stay and delay discovery.”

“We have been litigating on behalf of hundreds of injured Voyager investors for more than a year and will finally be able to uncover evidence of what transpired, and fully understand to what extent Mr. Cuban, and his Dallas Mavericks, were involved in the ‘offering’ of these unregistered securities and to what extent he was to profit,” they said.

Cuban’s counsel also spoke to Law360 and noted that the deposition of the plaintiffs will cover “issues of standing, alleged false statements included in the complaint and questions about the Voyager accounts held by the plaintiffs.”

The lawsuit in question was initially filed on Aug. 10. The plaintiffs allege that Cuban misrepresented Voyager on numerous occasions before it went bankrupt, making dubious claims of it being cheaper than competitors and offering “commission-free” trading services.

The suit also alleges that the firm offered unregistered securities and that Cuban and Voyager CEO Stephen Ehrlich utilized their sophisticated experience to rope uneducated investors to pour their life savings into what they now believe to be a “Ponzi scheme.”

Voyager filed for Chapter 11 bankruptcy on July 6 after facing liquidity issues as a result of crypto winter and a hefty loan to Three Arrows Capital that was defaulted on. The firm emphasized that the move was part of a “Plan of Reorganization.”

Wash trading will cause crypto’s next implosion: Mark Cuban

The majority of centralized exchange volume is fake, according to the billionaire investor and Dallas Mavericks owner.

Crypto token wash trading on centralized exchanges will be the cause of the next crypto “implosion,” according to billionaire Dallas Mavericks owner and crypto investor Mark Cuban.

In an interview with The Street on Jan. 5, the billionaire investor opined that 2023 will not be short of crypto scandals following the numerous fiascos that rocked 2022.

Cuban, who has backed several crypto and Web3 startups, said he believes the next biggest thing to impact the industry will be “the discovery and removal of wash trades on central exchanges.”

“There are supposedly tens of millions of dollars in trades and liquidity for tokens that have very little utilization,” he said before adding, “I don’t see how they can be that liquid.”

*Mark Cuban has backed several crypto startups. Source: American Broadcasting Company*

Wash trading, which is illegal under U.S. law, is a process whereby a trader or bot buys and sells the same crypto asset to feed misleading information to the market.

The goal is to artificially inflate volumes so that retail traders jump on the bandwagon and push prices up. In essence, it is a pump-and-dump scheme.

Cuban said he was just making a prediction, adding “I don’t have any specifics to offer to support my guess.”

As much as 70% of the volume on unregulated exchanges is wash trading, according to a December report by the National Bureau of Economic Research (NBER).

Researchers used statistical and behavioral patterns to determine which transactions were legitimate and which ones were spurious.

Furthermore, a 2022 study by Forbes on 157 centralized exchanges found that more than half the Bitcoin trade volumes were fake.

Wash trading isn’t just limited to centralized exchanges, however. On Jan. 5, Quantum Economics CEO and former eToro senior market analyst Mati Greenspan said that 42% of all NFT volume is wash traded.

Yeah. It’s 2023 and we’re still talking about wash trading. https://t.co/y9kiLbu4Eu

— Mati Greenspan (@MatiGreenspan) January 5, 2023

He added that wash trading is also used to harvest tax losses, making it appear (to the taxman) that there has been a greater loss than in reality.

Mark Cuban faces class action lawsuit for promoting Voyager crypto products

The lawsuit alleged Mark Cuban misrepresented the crypto offerings and services by Voyager and leveraged his years of experience to lure inexperienced customers into investing their life savings.

Mark Cuban, the billionaire entrepreneur who has been quite active in the crypto ecosystem for the past year, is facing a class-action lawsuit over his promotions of the bankrupt crypto brokerage firm Voyager Digital.

The Moskowitz Law Firm filed a civil suit in the United States District Court in Southern Florida against Cuban for promoting Voyager’s unregulated crypto products. The lawsuit demanded a jury hearing for the case.

The lawsuit alleged Cuban also misrepresented the firm on numerous occasions, making dubious claims of it being cheaper than competitors and offering “commission-free” trading services. Cuban, along with Voyager Digital CEO Stephen Ehrlich, leveraged their years of experience to lure inexperienced customers into investing their life savings in what they called a Ponzi Scheme, the lawsuit alleges

An excerpt from the lawsuit read:

“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 Program Accounts (‘EPAs’), which are unregistered securities.”

The lawsuit further alleged that Cuban continued to hype Voyager’s products and push retail investors to invest in it despite knowing it. Cuban went on record calling the Voyager platform “as close to risk-free as you’re gonna get in the crypto.” The lawsuit read:

“Voyager Platform relied on Cuban’s and the Dallas Maverick’s vocal support and Cuban’s monetary investment in order to continue to sustain itself until its implosion and Voyager’s subsequent bankruptcy.”

Voyager was one of many crypto lenders to Three Arrows Capital (3AC) that went bust after laters insolvency. The crypto lending firm paused trading activity and withdrawals on July 1 and eventually filed for chapter 11 bankruptcy on July 5. Currently, over 3.5 million American customers have nearly 5 billion dollars in cryptocurrency assets on the platform frozen.

Voyager was cleared to return $270 million in customer funds held at the Metropolitan Commercial Bank (MCB) by the judge presiding over its bankruptcy proceedings in New York. A day later, the lending firm announced that clients with U.S. dollars in their accounts could withdraw up to $100,000 in a 24-hour period starting as early as Aug. 11, with the funds received in 5–10 business days.

Bear market will last until crypto apps are actually useful: Mark Cuban

The billionaire investor said a bigger focus on applications and utility outside of finance would bring more back to the crypto space and possibly reverse the declining market.

Mark Cuban, the billionaire entrepreneur known for his role as one of the main investors on the reality television show Shark Tank, said the crypto bear market won’t be over until there’s a better focus on applications with utility.

He also doesn’t think the market has hit “cheap” prices yet.

Cuban has stated in the past around 80% of his non-Shark Tank portfolio was in crypto. Appearing on a June 23 episode of the Bankless Podcast, he was asked how long he believes the current crypto bear market will last:

“It lasts until there’s a catalyst and that catalyst is going to be an application, or we get so low people go ‘fuck it I’ll buy some.’”

He believes a better focus on applications with utility will pull crypto from its slump and with so many apps focused on financial technology or collectibles, the launch of a business focused application would be one of such events that could spark a reversal for markets.

Using the example of a “decentralized version of Quickbooks,” a small business accounting management software, Cuban predicted a rush of users if something like that launched.

Despite analysts predicting that Bitcoin (BTC) as well as many other cryptocurrencies have hit a price bottom, Cuban says “it’s not cheap yet” when analyzing the high market capitalization of some projects:

“You look at the market caps, and you see it’s a billion dollar plus market cap or $6 billion or $8 billion or $40 billion you don’t look at that and go ‘that’s cheap.’ If you remember back to DeFi Summer, these things were selling for less than a penny and their market caps were in the hundreds of millions.”

He adds even with lower market cap cryptos “there’s no utility,” and gives an example of the decentralized exchange (DEX) SushiSwap (SUSHI) token as a “relatively cheap” buy with its $215 million market cap, but added:

“You get paid it if you’re a liquidity provider, but then who’s going to buy it from you? What’s the reason to buy it from you?”

Cuban believes mergers between different protocols and blockchains will eventually see the crypto industry consolidate, as “that’s what happens in every industry.”

“I’d rather get with somebody who says ‘let’s do a roll-up,’” with Cuban saying that he’d support a merge of various blockchains, close others and then move applications and communities over to just one and offer a token exchange or bridge from the closing blockchains to port users over:

“Now all of a sudden your user base is 10x, you still have a problem of better applications, you still have to have some reason people want to use that blockchain but at least you may be able to have a better community to come up with ideas because otherwise you’re gone.”

With the crypto space having various sub sectors such as layer 1s, layer 2s, nonfungible tokens (NFTs) and decentralized finance (DeFi) tokens, Cuban was asked which he was most optimistic on.

Cuban said he was particularly interested in carbon offset DeFi tokens, which he burns to offset his own personal carbon footprint. He added that while not everyone cares about offsetting their carbon emissions, it was the “easiest way” in comparison to buying carbon offsets from a broker, which he claims is “a pain in the ass.”

Ultimately though, Cuban said “all of them have potential, that’s why they got all this money, all of them have a reason why they think they’re better and will succeed.”