The Lawsuit

Investors in the bankrupt cryptocurrency exchange Voyager Digital are suing the National Basketball Association (NBA), and New Jersey’s oldest law firm, McCarter & English. This emerging legal battle illustrates how even some of the largest and most reputable brands and companies can quickly become ensnared in controversy in an industry marred by a tangled web of regulations. 

The lawsuit contains allegations of significant misconduct by both the NBA and McCarter & English and focuses on both entities’ roles in promoting Voyager Digital to unsuspecting investors. The NBA and McCarter & English are just the latest named defendants in a case involving other household names such as the Dallas Mavericks, Mark Cuban, Rob Gronkowski, and Victor Oladipo. The Plaintiffs claim that the NBA’s influence as one of the United States’ premier sports leagues combined with the legal assurances and advice provided by the prestigious law firm McCarter & English contributed to their investment losses of $4.2 billion.

Specifically, the Plaintiffs allege that the NBA was “grossly negligent” in its role as a “gatekeeper” when it affirmatively approved various cryptocurrency-related promotion and marketing campaigns including its review of the proposed Voyager/Mavericks Global Partnership. However, the most contentious piece of this lawsuit may be the Plaintiffs’ allegations that McCarter & English played a crucial role in Voyager’s RICO enterprise. 

“Bogus” Legal Opinion

The Plaintiffs allege that McCarter & English issued a “bogus” legal opinion on Voyager’s token (VGX) and its Voyager Earn Program Accounts (EPAs), stating that they were unregistered securities. According to the complaint, McCarter & English was enlisted to alleviate investor concerns that VGX and EPAs were unregistered securities under U.S. law, even though it knew, or should have known, that such a conclusion was “false and illogical and served as the lynchpin for other co-conspirators to bypass the existing safety procedures.”

Despite McCarter & English’s myriad of resources and nearly two hundred years of experience, the firm finds itself smack in the middle of the latest in a string of high-profile bankruptcies in the digital assets industry. However, even if the Plaintiff’s allegations against McCarter & English, the NBA, and others ultimately fall short in court, this saga demonstrates the importance of obtaining crypto-native counsel. 

As attorneys operating exclusively in the digital asset space, we understand the importance of staying informed on the latest developments and helping clients stay compliant as cryptocurrency’s future in the United States continues to be shaped by regulatory developments. Whether you are an investor, entrepreneur, or business involved in cryptocurrency, our team is here to provide the legal counsel needed to maneuver this complex landscape. If you believe we can be of assistance, schedule a consultation here.