Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 1 of 92
`
`
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF FLORIDA
`MIAMI DIVISION
`
`Case No.:
`
`
`
`
`
`CLASS ACTION COMPLAINT
`
`
` JURY DEMAND
`
`
`
`
`
`
`
`Pierce Robertson, Rachel Gold, Sanford Gold,
`Rahil Sayed, Christopher Ehrentraut, Todd
`Manganiello, Dan Newsom, William Ayer,
`Anthony Dorn, Dameco Gates, Marshall Peters,
`and Edwin Garrison, on behalf of themselves and
`all others similarly situated,
`
`Plaintiffs,
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`v.
`
`
`Mark Cuban, Dallas Basketball Limited, d/b/a
`Dallas Mavericks, and Stephen Ehrlich,
`
`
`Defendants.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`/
`
`
`
`
`
`
`
`CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
`
`“I gotta add, I am a [Voyager] customer and I’ve been a customer for several
`months now. I like to use it, it’s easy, it’s cheap, it’s fast, and the pricing is actually
`really good, so we find it as a perfect fit for our Mavs fans and reaching Mavs fans
`of all ages.”
`—Mark Cuban
`
`“In stocks and crypto, you will see companies that were sustained by cheap, easy
`money — but didn’t have valid business prospects — will disappear. Like [Warren]
`Buffett says, ‘When the tide goes out, you get to see who is swimming naked.”
`—Mark Cuban
`
`“Mark is a tremendous advisor to me and we have a great relationship. He is a
`big believer in crypto. Sometimes the value someone brings is not what the public
`sees but where they give you guidance and help behind the scenes.”
`—Stephen Ehrlich
`
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 2 of 92
`
`
`
`Plaintiffs Pierce Robertson, Rachel Gold, Sanford Gold, Rahil Sayed, Christopher
`Ehrentraut, Todd Manganiello, Dan Newsom, William Ayer, Anthony Dorn, Dameco Gates,
`Marshall, and Edwin Garrison file this class action complaint on behalf of themselves, and all
`others similarly situated, against Mark Cuban (“Cuban”), Dallas Basketball Limited, d/b/a Dallas
`Mavericks (the “Mavericks”), and Stephen Ehrlich (“Ehrlich”).
`INTRODUCTION
`On December 24, 2021, counsel for Plaintiffs and the class members brought a class
`1.
`action complaint styled Mark Cassidy v. Voyager Digital Ltd., et al., Case No. 21-24441-CIV-
`ALTONAGA/Torres (the “Cassidy Action”), alleging that the Deceptive Voyager Platform owned
`and operated by Voyager Digital Ltd. (“Voyager”) and Voyager Digital LLC (“VDL”) was an
`unregulated and unsustainable fraud, similar to other Ponzi schemes. It was specifically alleged in
`detail in that complaint how Defendants Mark Cuban and Stephen Ehrlich were key players
`who personally reached out to investors, individually and through the Dallas Mavericks, to induce
`them to invest in the Deceptive Voyager Platform.
`Cuban and Ehrlich, as will be explained, went to great lengths to use their
`2.
`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.1 As a result, over 3.5 million Americans have now
`all but lost over 5 billion dollars in cryptocurrency assets. This action seeks to hold Ehrlich, Cuban,
`and his Dallas Mavericks responsible for paying them back.
`
`
`1 https://currency.com/crypto-brokerage-scores-dallas-mavericks-sponsorship (accessed August 10, 2022).
`
`
`
`2
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 3 of 92
`
`
`
`3.
`
`As alleged in paragraphs 1–8 of the Cassidy Complaint:
`
`Voyager has quickly become one of the most utilized avenues for nascent
`investors to purchase cryptocurrency, and thus has already reaped hundreds of
`millions of dollars in revenue since 2019, which is increasing exponentially every
`week. The Voyager Defendants operate a multi-billion-dollar mobile application
`cryptocurrency investment service (the “Deceptive Voyager Platform”) that places
`cryptocurrency trade orders on behalf of users like Plaintiff and Class Members.
`The Voyager Defendants specifically target young and inexperienced investors,
`who are certainly new to cryptocurrency trading and mainly utilize mobile apps
`(rather than any sophisticated software) for trading, through the use of youth-
`forward marketing, promises of interest payments on cryptocurrency holdings (if a
`minimum balance is met), and uniform representations that the Deceptive Voyager
`Platform is “100% Commission-Free,” while also assuring customers that they will
`receive the best possible price on cryptocurrency trades. As will be explained with
`extensive expert support, the Voyager Defendants’ statements and representations
`are false, misleading and certainly violate numerous state and federal consumer
`statutes.
`
`The Deceptive Voyager Platform is based upon false pretenses, false
`representations, and is specifically designed to take advantage of investors that
`utilize mobile apps to make their investments, in an unfair, unsavory, and deceptive
`manner. Simply put, Plaintiffs will prove that the Deceptive Voyager Platform is a
`house of cards, built on false promises and factually impossible representations that
`were specifically designed to take advantage of the cryptocurrency craze to the
`direct detriment of any ordinary investor.
`
`The Voyager Defendants offer what they misleadingly claim to be “100%
`Commission-Free” cryptocurrency trading services, in order to unfairly obtain an
`edge over their competition, such as Coinbase, Gemini, Kraken, or Binance, who
`openly disclose the commissions and fees they charge on cryptocurrency trades.
`This tactic directly evolved from the alleged “no commission” alternatives offered
`by numerous brokerage houses in the 1980s.
`
`3
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 4 of 92
`
`
`
`In reality and unbeknownst to the Voyager Defendants’ unsuspecting and
`largely unsophisticated consumers (especially considering that cryptocurrency is an
`emerging and innovative market with differences from traditional stock exchanges
`not appreciated by the average retail consumer), the Voyager Defendants never
`disclose that they intentionally set the pricing on their Voyager Platform high
`enough that they do, in fact, collect exorbitant hidden commissions on every
`cryptocurrency trade.
`
`Capitalizing on their customers’ naivete by using their proprietary systems
`to throw up smoke screens, including “Smart Order Routing,” the “Voyager Pricing
`Engine,” and the “Proprietary Fills Algorithm,” numerous experts explain that the
`Voyager Defendants place their own financial interests at the forefront, and are able
`to collect on average what is likely to be more in hidden commissions than their
`competition collect from their disclosed commissions.
`
`The very public support from the Dallas Mavericks and their owner, Mark
`Cuban, including their recent massive investment in the Deceptive Voyager
`Platform, gives a great illustration of how the Voyager Defendants are targeting
`unsophisticated investors with false and misleading promises of reaping large
`profits in the cryptocurrency market.
`
`Mark Cuban recently spoke at a Dallas Mavericks press conference,
`conducted over the internet, where he strongly supported and touted the partnership
`between his company and the Voyager Defendants. Mr. Cuban proudly described
`how he would personally help significantly increase scope and presence of the
`Deceptive Voyager Platform for those with limited funds and experience:
`
`You know, there’s a lot of hype, there’s a lot of discussion, but most people
`don’t understand the fundamentals behind it. We’re going to try to bring
`that level of education to our fans and to our joint customers.”
`To put it simply: there’s untapped potential in the future of digital currencies
`and it’s an attractive investment for novice investors who might only have
`$100 to start. That’s where Voyager enters the picture.
`In other words, it’s a way to earn high returns while also getting skin in the
`game and the Voyager platform makes the process easy and simplified for
`
`4
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 5 of 92
`
`
`
`fans of all ages. The 60+ crypto assets allows you to build a diverse portfolio
`from a single account.
`You don’t have to spend a lot of money in order to learn. It’s not like the
`stock market where it’s almost impossible, except on a few platforms, to
`spend $10 and get started. My now 12-year-old son got me in Dogecoin
`when it was less than a penny. I was like “let’s do this” because it’s a cheap
`way for him to learn how all of this works. While you have to put in a $100
`to get the $100 bonus the next two days, if you don’t have a hundred dollars
`and you just want to download the app and put in $5 and buy SHIBA INU
`(SHIB) and Dogecoin (DOGE), there’s a lot of ways to inexpensively start.2
`Voyager’s President and Chief Officer, Steve Ehrlich agreed with Mr.
`Cuban and added as follows:
`
`That’s one of the advantages of Voyager. You can actually download the
`app and fund your account and trade in three minutes or less. We make it
`really simple. We have a very easy-to-use and integrative platform that
`allows you to get engaged in the crypto market very quickly. That’s one of
`the values of Voyager. You’ll be trading in three minutes or less.
`About 220 million people have crypto right now and we (anticipate) a
`billion in four years. So that shows you where we can actually go with
`crypto and crypto adoption. Now the comparison there is the internet. It took
`the internet eight years, for the same time frame, for the internet to grow
`that fast. So it’s a great time to enter the space and learn more. 3
`The allegations in the Cassidy complaint—and specifically Mark Cuban’s role in
`4.
`the Deceptive Voyager
`Platform—received
`national
`attention.
`promoting
`See
`https://www.jdsupra.com/legalnews/new-lawsuits-target-cryptocurrency-9604406/ (summarizing
`the allegations and explaining that “Mark Cuban, owner of the NBA’s Dallas Mavericks, is a major
`stakeholder in Voyager. The complaint alleges that he made comments at a press conference in
`which he specifically targeted unsophisticated investors ‘with false and misleading promises of
`reaping
`large
`profits
`in
`the
`cryptocurrency
`market.’”);
`https://www.law.com/dailybusinessreview/2021/12/29/mark-cuban-linked-crypto-platform-hit-
`with-florida-nationwide-class-action-lawsuit-in-miami-federal-court/?slreturn=20220701214901
`(same, in the Daily Business Review).
`After the Cassidy Complaint was filed, the following important actions took place:
`5.
`
`
`2 https://www.mavs.com/mavsvoyager/
`3 Id.
`
`5
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 6 of 92
`
`
`
`(a) the United States Securities and Exchange Commission (SEC) began an
`enforcement review focused on whether Voyager’s Earn Program Accounts
`(“EPAs”) constitute unregistered securities;
`(b) seven state Attorney Generals (New Jersey, Alabama, Kentucky, Oklahoma,
`Texas, Vermont and Washington) took specific action finding that Voyager was
`violating their state laws, including issuing “cease and desist” letters to
`Voyager, finding that the EPAs, like the one Plaintiff Mark Cassidy was offered
`and sold by Voyager, was an unregistered security, prohibiting the crypto-asset
`broker-dealer from selling any more unregistered securities (finding that
`Voyager used these EPAs to raise millions of dollars in revenue worldwide as
`of March 1, 2022 (thousands of these EPAs were Florida-based);
`(c) On March 29, 2002, the State of New Jersey Bureau of Securities entered a
`Cease and Desist Order against Voyager, finding that the Earn Program is not
`exempt from registration under the law, and instead that it must be registered—
`and as a result, Voyager’s stock price tanked by 25% in a day and is down over
`80% for the year;4
`(d) On February 14, 2022, crypto trader Block-Fi entered into a $50 million dollar
`settlement with the state regulators and $50 million dollar settlement with the
`SEC and agreed to stop selling its interest-bearing cryptocurrency accounts
`until they were registered with state and federal securities regulators;
`(e) In September 2021, the New Jersey Bureau issued a Summary Cease and Desist
`Order against Celsius Network LLC, whose unlawful unregistered securities
`had raised at least $14 billion nationwide;5 and,
`(f) the largest cypto exchange, COINBASE, dropped all plans to offer the same
`lending rewards program after the SEC threated to sue them.6
`Voyager’s CEO, Steve Ehrlich, told his investors, and the public, on his last
`6.
`investor call, that Voyager is now determining what to do in regards to all of these state and federal
`investigations: “… that’s a conversation between myself, out internal GC, our advisors. And we
`have a very, very deep team, and we’re evaluating all that at this point in time.”7
`
`
`4
`(accessed
`https://seekingalpha.com/article/4498956-voyager-digital-plunged-25-percent-heres-why
`August 10, 2022); https://seekingalpha.com/article/4503716-voyager-digital-buy-dip-during-crypto-crash
`(accessed August 10, 2022)
`5
`https://www.njoag.gov/new-jersey-bureau-of-securities-orders-cryptocurrency-company-voyager-
`digital-to-stop-offering-and-selling-interest-bearing-accounts/ (accessed August 10, 2022)
`6
`https://www.coindesk.com/policy/2022/01/26/sec-scrutinizing-crypto-firms-over-interest-paying-
`services-report/ (accessed August 10, 2022)
`7 Transcript of Voyager Digital FY2Q 2022 Earnings Call dated February 15, 2022, Exhibit A.
`
`6
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 7 of 92
`
`
`
`As the Cassidy action proceeded through discovery and motion practice on issues
`7.
`relating to arbitration and personal jurisdiction over the Voyager entities, and just before class
`counsel was able to serve third party discovery on Cuban (who, discovery in the Cassidy action
`showed, personally asked Ehrlich whether he should be worried about the Cassidy action), the
`news broke that Voyager’s irresponsible lending activities drove them to lose hundreds of millions
`of dollars of customer cryptocurrency assets, and Voyager quickly filed Chapter 11 bankruptcy.8
`As a result, the Cassidy action is currently stayed by virtue of the automatic stay.
`Before filing for Chapter 11 bankruptcy, just like Scott Rothstein did in his
`8.
`infamous Ponzi scheme, it was a necessary element, to continue to persuade, influence and
`convince the common investor, as cash was getting scarce, to continue to put their earned money
`(sometimes life savings) into specifically the Deceptive Voyager Platform. To do this, Stephen
`Ehrlich, CEO and founder of Voyager, made a plethora of false and misleading public statements
`that were broadcast around the country through the internet, and enlisted the help of Mark Cuban
`to do the same, who also invested his own money into the Deceptive Voyager Platform for this
`purpose.
`
`
`https://www.mavs.com/photos/voyager-press-conference/ (accessed August 10, 2022).
`Importantly, although Cuban disclosed the partnership between Voyager and the
`9.
`Dallas Mavericks, he has never disclosed the nature, scope, and amount of compensation he has
`
`8
`https://www.cnbc.com/2022/07/06/crypto-firm-voyager-digital-files-for-chapter-11-bankruptcy-
`protection.html (accessed August 10, 2022).
`
`7
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 8 of 92
`
`
`
`personally received in exchange for the promotion of the Deceptive Voyager Platform, which the
`SEC has explained that a failure to disclose this information would be a violation of the anti-touting
`provisions of the federal securities laws.9
`The SEC took action against boxing champ Floyd Mayweather and music producer
`10.
`DJ Khaled after they were paid by cryptocurrency issuers to tweet promotional statements about
`investing in Initial Coin Offerings (ICOs), ordering them both to pay disgorgement, penalties and
`interest for promoting investments in ICOs, including one from cryptocurrency issuer Centra Tech,
`Inc, for a combined total of $767,500 because they failed to disclose that their promotional efforts
`on Twitter were paid endorsements.10
`Other celebrities similarly accused and prosecuted for failing to disclose their paid
`11.
`endorsements include Kim Kardashian and basketball player Paul Pierce.11 According to the
`Federal Trade Commission, cryptocurrency scams have increased more than ten-fold year-over-
`year with consumers losing more than $80 million since October 2020, due in large part to the use
`of such celebrity endorsements. 12
`Cuban’s enthusiasm over the Voyager/Mavericks partnership was shared by Steve
`12.
`Erhlich, CEO and co-founder of Voyager, who said the company “could not be more excited”
`about partnering with the Mavs. 13 “This partnership gives us the opportunity to educate people all
`over the world on ways to use crypto in their everyday lives. We want to help people learn alternate
`ways to grow their wealth to achieve true financial freedom and build intergenerational wealth
`through crypto,” he added. 14
`Ehrlich made it clear that Cuban was integral to his plan to push the Deceptive
`13.
`Voyager Platform on retail investors around the country: “What we think that we’ll be able to
`
`
`9
`https://www.ubergizmo.com/2017/11/sec-celebrities-disclose-payment-cryptocurrency-
`endorsements/#:~:text=It%20has%20issued%20a%20statement%20warning%20celebrities%20that,witho
`ut%20disclosing%20that%20they%E2%80%99ve%20been%20paid%20for%20it (accessed August 10,
`2022).
`10
`https://news.bloomberglaw.com/us-law-week/insights-celebrity-endorsements-and-cryptocurrency-a-
`cautionary-tale (accessed August 10, 2022).
`11
`https://blockbulletin.com/news/altcoins/kim-kardashian-among-other-celebrities-sued-for-promoting-
`cryptocurrencies/ (accessed August 10, 2022).
`12 https://florida.foolproofme.org/articles/770-celebrity-cryptocurrency-scam (accessed August 10, 2022).
`13
`https://decrypt.co/84639/crypto-broker-voyager-digital-partner-mark-cubans-dallas-mavericks
`(accessed August 10, 2022).
`14
`https://decrypt.co/84639/crypto-broker-voyager-digital-partner-mark-cubans-dallas-mavericks
`(accessed August 10, 2022).
`
`8
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 9 of 92
`
`
`
`deliver—and it starts here, it starts in Dallas—is teaching people about decentralized finance,
`cryptocurrencies and nonrefundable tokens,” Voyager Digital CEO and Co-founder Steve Ehrlich
`said. “We really want to bring that to the community. We’ll start that now. And some say, ‘Why
`the Mavs?’ Because of Mark and the leadership he brings to the NBA when it comes to
`cryptocurrencies.”15
`14. Mark Cuban, in turn, went on record calling the Deceptive Voyager Platform “as
`close to risk free as you’re gonna get in the crypto universe.” 16
`Cuban even hyped up the fact that he was investing his own money into the
`15.
`Deceptive Voyager Platform to further induce retail investors to follow in his footsteps:17
`I gotta add, I am a customer and I’ve been a customer for several months now, I
`like to use it, it’s easy, it’s cheap, it’s fast, and the pricing is actually really good,
`so we find it as a perfect fit for our Mavs fans and reaching Mavs fans of all ages.
`Cuban went so far in his promotion of Voyager that he had even staged a press
`16.
`conference with Voyager CEO Steve Ehrlich, where newly signed New York Knick Jalen
`Brunson, then a Maverick, asked, “If this is my first time getting into crypto, what are some key
`things I need to know?”
`
`
`
`
`15 https://www.forbes.com/sites/doylerader/2021/10/28/dallas-mavericks-announce-five-year-partnership-
`with-cryptocurrency-brokerage-voyager-digital/?sh=64aacae92e99
`16 https://www.proactiveinvestors.com/companies/amp/news/987495
`17 https://www.youtube.com/watch?v=aB9GpBOroIw (accessed August 10, 2022)
`
`9
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 10 of 92
`
`
`
`“Yeah, you’re spending your money, so always be careful,” Cuban responded at
`17.
`the time. “But the other thing, look, there’s investments, things like Shiba Inu and Dogecoin, those
`aren’t investments. But Voyager … this is a good way to learn and it’s something you can do on
`your smart phone. You can start getting into this and saving your money and that’s just a unique
`opportunity.”18 Ironically, Cuban concluded that “[i]n stocks and crypto, you will see companies
`that were sustained by cheap, easy money — but didn’t have valid business prospects — will
`disappear,” Cuban said. “Like [Warren] Buffett says, ‘When the tide goes out, you get to see who
`is swimming naked.’” 19
`As the Texas regulators explain in their recent filing in the Voyager Chapter 11
`18.
`bankruptcy, misrepresentations regarding Voyager were made on a regular basis:20
`
`Voyager claims it is a “fully compliant and licensed crypto broker” and touts its
`status as a public company, its listing on the Toronto Stock Exchange, and the “trust
`and transparency” resulting from its being a public company in Canada. These
`statements are materially misleading or otherwise likely to deceive the public
`because:
`• Respondents are not licensed as money service businesses in Texas to conduct
`currency exchange or money transmission activities defined by Chapter 151 of the
`Texas Finance Code;
`• Respondents are not registered with the Commodity Futures Trading Commission
`or the National Futures Association;
`• Respondents are not licensed, registered, or qualified, nor are their securities
`notice filed, with the United States Securities and Exchange Commission;
`• Respondents are not registered with the Texas State Securities Board to offer or
`sell securities in Texas, as required by Section 4004.051 of the Securities Act, and
`the Voyager Interest Accounts are not registered or permitted for sale in Texas, as
`required by Section 4003.001 of the Securities Act;
`• The Voyager Interest Accounts are not protected by the Securities Investor
`Protection Corporation, otherwise known as the SIPC, a federally mandated, non-
`profit, member funded United States corporation created under the Securities
`Investor Protection Act of 1970 that mandates membership of most US-registered
`broker-dealers;
`• The Voyager Interest Accounts are not insured by the Federal Deposit Insurance
`
`
`18
`https://nypost.com/2022/07/06/dallas-mavericks-fans-fume-at-mark-cuban-over-voyager-crypto-
`bankruptcy/ ; https://www.thestreet.com/investing/cryptocurrency/mark-cuban-caught-in-bankruptcy-of-
`crypto-lender-voyager
`19
`https://nypost.com/2022/07/06/dallas-mavericks-fans-fume-at-mark-cuban-over-voyager-crypto-
`bankruptcy/ ; https://www.thestreet.com/investing/cryptocurrency/mark-cuban-caught-in-bankruptcy-of-
`crypto-lender-voyager
`20
`https://www.ssb.texas.gov/sites/default/files/2022-04/20220412_FINAL_Voyager_NOH_312-22-
`2244.pdf (accessed August 10, 2022).
`
`10
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 11 of 92
`
`
`
`Corporation, otherwise known as the FDIC, an agency that provides deposit
`insurance to depositors in the United States, or the National Credit Union
`Administration, otherwise known as the NCUA, an agency that regulates and
`insures credit unions;
`• Although Voyager’s stock is listed on the Toronto Stock Exchange, the Voyager
`Interest Accounts are not registered, qualified, or permitted in Canada and Voyager
`represents Canadian investors cannot invest in the Voyager Interest Accounts;
`• The Canadian laws that apply to Voyager’s securities listed on the Toronto Stock
`Exchange do not provide the same regulation or protection as domestic laws that
`apply to Voyager Interest Accounts Voyager sells exclusively to United States
`residents; and
`• Voyager is not disclosing material risks relevant to these statements, material
`information including the amount of principal used to fund subsequent transactions,
`the identity, nature, and creditworthiness of borrowers, the type, nature, and
`counterparties for transactions involving digital asset exchanges, digital assets,
`staking, arranging for staking, or proprietary trading, the risks associated with
`digital asset exchanges, individual digital assets, staking protocols, or proprietarily
`traded assets, and the profits and/or losses derived from transactions.
`Voyager Digital LTD (“Voyager”) and Voyager Digital LLC (“VDL”) operate a
`19.
`multi-billion-dollar mobile application cryptocurrency investment service (the “Deceptive
`Voyager Platform”) that places cryptocurrency trade orders on behalf of users like Plaintiff and
`Class Members. These companies promise young, inexperienced investors interest payments on
`cryptocurrency holdings (if a minimum balance is met) and represent that the Deceptive Voyager
`Platform is “100% Commission-Free,” while also assuring customers that they will receive the
`best possible price on cryptocurrency trades.
`is based upon false pretenses, false
`The Deceptive Voyager Platform
`20.
`representations, and is specifically designed to take advantage of investors that utilize mobile apps
`to make their investments, in an unfair, unsavory, and deceptive manner. Simply put, Plaintiffs
`will prove that the Deceptive Voyager Platform is a house of cards, built on false promises and
`factually impossible representations that were specifically designed to take advantage of the
`cryptocurrency craze to the direct detriment of any ordinary investor.
`Put differently, the Deceptive Voyager Platform was a massive Ponzi scheme, and
`21.
`it 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.
`In reality and unbeknownst to unsuspecting and largely unsophisticated consumers
`22.
`(especially considering that cryptocurrency is an emerging and innovative market with differences
`from traditional stock exchanges not appreciated by the average retail consumer), VDL never
`
`11
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 12 of 92
`
`
`
`discloses that they intentionally set the pricing on the Voyager Platform high enough that they do,
`in fact, collect exorbitant hidden commissions on every cryptocurrency trade.
`Ehrlich also misrepresented Voyager’s FDIC insured status, repeatedly stating that
`23.
`assets held in the Deceptive Voyager Platform are as “safe” as if they were in a bank, misleading
`customers and prospective customers with the false impression that any cryptocurrency assets held
`on the Deceptive Voyager Platform were FDIC insured. Ehrlich even misrepresented the extent of
`the FDIC insurance on USD holdings, misleading customers with the false impression that each
`Voyager customer could hold up to $250,000 in their individual Voyager account wallets and avail
`themselves of that important federal protection in the event Voyager failed. This is similar to the
`official stance of the Voyager entities, which was representing that “Your USD is held by our
`banking partner, Metropolitan Commercial Bank, which is FDIC insured, so the cash you hold
`with Voyager is protected,” Voyager’s website said, claiming deposits are “FDIC insured on USD
`$250,000.”21 Voyager had also tweeted (@investvoyager, on November 12, 2020): Have you
`heard? USD held with Voyager is FDIC insured up to $250K. Our customers’ security is our top
`priority. Start growing your crypto portfolio today. 22 Similar misrepresentations were present on
`the Voyager website:
`
`
`But those claims “are false and misleading,” officials from the FDIC and the
`24.
`Federal Reserve said in a letter to Voyager Thursday. Voyager’s claims “likely misled and were
`
`
`21 https://www.cbsnews.com/news/voyager-fdic-insurance-federal-reserve/ (accessed August 10, 2022).
`22 Id.
`
`12
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 13 of 92
`
`
`
`relied upon by customers who placed their funds with Voyager and do not have immediate access
`to their funds,” the letter said. The officials demanded that the company scrub those claims from
`its website and social media, and give written confirmation by Monday that they’ve done so. 23
`The FDIC is a government agency tasked with guarding the public’s bank accounts
`25.
`— such as checking, savings and CDs — against unforeseen losses. Having a FDIC insured
`account means that anyone who has up $250,000 deposited into a bank would have their money
`reimbursed if the bank unexpectedly fails. However, speculative investments such as stocks and
`cryptocurrencies typically aren’t FDIC insured. 24
`Ehrlich, Cuban, and the Dallas Mavericks pushed these false representations,
`26.
`knowing full well they were false, and lent their credibility as experienced investors to dupe the
`public into investing into the Deceptive Voyager Platform.
`As will be explained with extensive expert support, these statements and
`27.
`representations are false, misleading and certainly violate numerous state and federal consumer
`statutes.
`Voyager also markets and offers for sale unregistered securities in the form of
`28.
`cryptocurrency interest-earning accounts. Since Voyager first introduced these unregistered
`securities to consumers in the United States in November 2019, it has referred to them by various
`names, including the “Voyager Interest Program” or the “Voyager Earn Program Account”
`(collectively, the “EPA”).
`Voyager never registered the EPAs with the United States Securities and Exchange
`29.
`Commission (“SEC”) or with the financial regulators of Florida, New Jersey, California,
`Pennsylvania, Oklahoma, Tennessee, Alabama, Virginia, or Louisiana.
`Defendants, who are seen and acknowledged by the general public as “experts” in
`30.
`cryptocurrency, have publicly supported and endorsed Voyager and have encouraged and even
`incentivized consumers into investing in Voyager.
`Defendants, individually and through Voyager, engaged in and/or participated in
`31.
`an illegal offering and sale of unregistered securities and, in connection with the offering, engaged
`in fraudulent conduct and made material misstatements designed to deceive investors. By doing
`so, Defendants aided and abetted Voyager’s securities laws violations.
`
`23 Id.
`24 Id.
`
`
`
`13
`
`

`

`Case 1:22-cv-22538-XXXX Document 1 Entered on FLSD Docket 08/10/2022 Page 14 of 92
`
`
`
`Defendants have also misrepresented the reality behind Voyager’s Deceptive
`32.
`Platform and how it operates. Defendants’ representations regarding the “100% Commission-
`Free” Voyager Platform are false, deceptive, and are objectively very likely to deceive average
`consumers acting reasonably under the circumstances. Accordingly, Defendants’ conduct violates
`multiple consumer and securities statutes, including those in Florida, New Jersey, California,
`Pennsylvania, Oklahoma, Tennessee, Alabama, Virginia, or Louisiana.
`Plaintiffs thus seek damages and restitution on behalf of themselves and the Class
`33.
`members.
`
`PARTIES
`
`Plaintiff Pierce Robertson is a citizen and resident of the State of Florida. He is a
`34.
`natural person over the age of 21 and is otherwise sui juris. Plaintiff Robertson purchased an
`unregistered security from Voyager in the form of an EPA and funded the account with a sufficient
`amount of crypto assets to earn interest on his holdings. Plaintiff Robertson did so after being
`exposed to some or all of Cuban’s and Ehrlich’s misrepresentations and omissions regarding the
`Deceptive Voyager Platform as detailed in this complaint, and executed trades on the Deceptive
`Voyager Platform in reliance on those misrepresentations and omissions. As a result, Plaintiff
`Robertson has sustained damages for which Cuban and Ehrlich are liable.
`Plaintiff Rachel Gold is a citizen and resident of the State of Florida. She is a natural
`35.
`person over the age of 21 and is otherwise sui juris. Plaintiff Ms. Gold purchased an unregistered
`security from Voyager in the form of an EPA and funded the account with a sufficient amount of
`crypto assets to earn interest on her holdings. Plaintiff Ms. Gold did so after being exposed to some
`or all of Cuban’s and Ehrlich’s misrepresentations and omissions regarding the Deceptive Voyager
`Platform as detailed in this complaint, and executed trades on the Deceptive Voyager Platform in
`reliance on those misrepresentations and