Lawsuit Against Mark Cuban and Dallas Mavericks Dismissed on Jurisdictional Grounds

A U.S. federal judge has dismissed a lawsuit involving cryptocurrency investors against Mark Cuban and the Dallas Mavericks, primarily on the basis of jurisdiction.

Key Takeaways

Jurisdiction Dismissal: The lawsuit against Mark Cuban and the Dallas Mavericks was dismissed by a federal judge due to lack of jurisdiction in Florida.
Promotional Allegations: The plaintiffs alleged that Cuban and the Mavericks promoted Voyager Digital’s products, which led to significant investor losses after the company declared bankruptcy.
Legal Context: The dismissal centered on the lack of personal jurisdiction rather than addressing the claims of misleading promotions.
History of Voyager: Voyager Digital filed for bankruptcy in 2022, impacting millions of customers and prompting legal actions against various promoters in the crypto space.
Ongoing Legal Battle: Although the case was dismissed, plaintiffs may still pursue claims in a different jurisdiction.

Mark Cuban exits Voyager crypto lawsuit

A federal court in Florida ruled that the plaintiffs failed to show sufficient legal ties between the state and the alleged promotional activities related to Voyager Digital. This case is part of a broader legal trend targeting celebrities and sports teams accused of promoting failing cryptocurrency platforms.

Main Content

A lawsuit filed by cryptocurrency investors against Mark Cuban and the Dallas Mavericks has been dismissed by Judge Roy K. Altman of the U.S. District Court for the Southern District of Florida. The core reason for the dismissal was the plaintiffs' inability to establish personal jurisdiction over the defendants in Florida, as stated in court documents.

The lawsuit, initiated in 2022, accused Cuban and the Mavericks of leveraging their prominence to promote the products of Voyager Digital. This promotion allegedly contributed to significant losses for investors when Voyager filed for bankruptcy. This suit is part of wider litigation efforts aimed at various celebrities, athletes, and sports teams linked to the promoting of cryptocurrency platforms that later collapsed.

The judge's ruling concentrated solely on jurisdiction rather than examining if the promotions were deceptive or improper. The decision emphasized that nationwide or online promotional activities do not inherently imply that Florida residents were specifically targeted, according to the state's long-arm statute and constitutional due-process standards.

The court dismissed the case without prejudice, allowing the plaintiffs the option to file claims elsewhere if they choose. The plaintiffs referenced comments made by Cuban during a news conference in October 2021, wherein he acknowledged his personal investment in Voyager. They also mentioned a Mavericks promotion that marketed $100 in Bitcoin to any customers who downloaded the Voyager app, opened an account, deposited $100, and completed a trade.

Cuban's legal representatives contended that neither he nor the Mavericks specifically aimed their promotions at Florida residents. They emphasized that Cuban had consistently warned the public to be cautious about their investment choices in cryptocurrency.

Brown Rudnick, the law firm representing Cuban and the Mavericks, stated that the ruling concluded years of litigation and jurisdictional discovery. The firm asserted that the court found national advertising campaigns alone cannot justify jurisdiction wherever an investor claims harm. Lead counsel Steve Best expressed satisfaction with the outcome, suggesting the defense is ready to challenge the claims in any other venue should the plaintiffs decide to pursue further action. He noted that Cuban prefers not to settle when he feels he’s justified in his legal stance.

Voyager Digital entered Chapter 11 bankruptcy protection in July 2022 after experiencing market losses and failures from key partners. At its height in 2021, the company managed over $5 billion in assets and catered to nearly 3.5 million customers.

This event has led to a number of lawsuits against various executives and promoters as investors seek to clarify the legal standings regarding cryptocurrency marketing and celebrity endorsements.

In late 2023, Cuban sold his majority stake in the Mavericks to casino mogul Miriam Adelson but has retained a minority interest and continues to be involved with the team's basketball operations.