Thursday, July 18, 2024

Former SEC official compares Dallas Mavericks’ Voyager partnership to heroin



John Reed Stark, the previous web enforcement chief for the US Securities and Trade Fee (SEC), has sided with aggrieved crypto buyers in a lawsuit in opposition to the Nationwide Basketball Affiliation (NBA).

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In a Feb. 8 X submit, Stark criticized the NBA for approving a partnership between defunct cryptocurrency alternate Voyager Digital and the Dallas Mavericks, leading to a class-action lawsuit from buyers. The partnership between Voyager and the NBA group, introduced in October 2021, got here because the crypto alternate allegedly made false claims concerning investor safety.

“[In my humble opinion], by partnering with Voyager, the Mavs not solely shamelessly exploited their followers and gamers by shilling crypto FOMO and diamond arms, however the Mavs additionally share culpability for the devastation that Voyager wreaked upon its buyers,” mentioned Stark. “Consider it this manner: if the Washington Wizards determined to accomplice with a heroin manufacturing agency or a blood diamond mining firm, the NBA would definitely step in and prohibit that association. The identical ought to go for crypto-partnerships.”

He added:

“Whether or not the NBA bears any culpability for the alleged Voyager fraud stays unclear. However my take is that the NBA must be held answerable for Voyager-related and different comparable sorts of alleged misconduct by NBA groups.”

Voyager filed for Chapter 11 bankruptcy in July 2022 amid a crypto market downturn and roughly eight months after the Mavericks partnership was introduced. In October 2023, America Commodity Futures Buying and selling Fee and Federal Commerce Fee (FTC) filed parallel lawsuits in opposition to former Voyager CEO Stephen Ehrlich for fraudulent statements.

The crypto alternate settled with the FTC for $1.65 billion in financial aid in November 2023. Stark hinted that the NBA also needs to face prison prices for its alleged role in misleading investors along with the civil class-action lawsuit filed on Feb. 6.

Associated: Mark Cuban to face questioning under oath over promotion of Voyager

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Voyager’s case in U.S. Chapter Courtroom for the Southern District of New York was ongoing on the time of publication. As of Could 2023, a restructuring plan proposed having Voyager prospects initially recover 35.7% of their claims in cryptocurrency or money.

Stark labored as an enforcement legal professional with the SEC and headed its Workplace of Web Enforcement for a mixed 18 years of service mixed. He’s presently the president of John Reed Stark Consulting.

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