United

FOMO

John Reed Stark, the former internet enforcement chief for the United States Securities and Exchange Commission, has sided with aggrieved crypto investors in a lawsuit against the National Basketball Association (NBA).
In a Feb. 8 X post, Stark <a href="https://twitter.com/JohnReedStark/status/1755594335888826462" target="_blank" rel="noopener nofollow">criticized</a> the NBA for approving a partnership between defunct cryptocurrency exchange Voyager Digital and the Dallas Mavericks, resulting in a class-action lawsuit from investors. The partnership between Voyager and the NBA team, announced in October 2021, came as the crypto exchange allegedly made false claims regarding investor protection.
“[In my humble opinion], by partnering with Voyager, the Mavs not only shamelessly exploited their fans and players by shilling crypto FOMO and diamond hands, but the Mavs also share culpability for the devastation that Voyager wreaked upon its investors,” said Stark. “Think of it this way: if the Washington Wizards decided to partner with a heroin manufacturing firm or a blood diamond mining company, the NBA would certainly step in and prohibit that arrangement. The same should go for crypto-partnerships.”
He added:
<blockquote data-ct-non-breakable="true">
 “Whether the NBA bears any culpability for the alleged Voyager fraud remains unclear. But my take is that the NBA should be held responsible for Voyager-related and other similar kinds of alleged misconduct by NBA teams.”
</blockquote>
<blockquote class="twitter-tweet">
 The NBA is Charged With Crypto Fraud: It’s About Time. The crypto carnage fallout continues as Voyager’s investors have just filed a 108-page proposed class action against the National Basketball Association (NBA) and the law firm McCarter &amp; English for their roles in the… <a href="https://t.co/c3qLqZDj58">pic.twitter.com/c3qLqZDj58</a>— John Reed Stark (@JohnReedStark) <a href="https://twitter.com/JohnReedStark/status/1755594335888826462?ref_src=twsrc%5Etfw">February 8, 2024</a>
</blockquote> 
Voyager <a href="https://cointelegraph.com/news/voyager-digital-files-for-chapter-11-bankruptcy-proposes-recovery-plan">filed for Chapter 11 bankruptcy</a> in July 2022 amid a crypto market downturn and roughly eight months after the Mavericks partnership was announced. In October 2023, the United States Commodity Futures Trading Commission and the Federal Trade Commission (FTC) <a href="https://cointelegraph.com/news/cftc-action-former-voyager-digital-ceo">filed parallel lawsuits</a> against former Voyager CEO Stephen Ehrlich for fraudulent statements.
The crypto exchange <a href="https://cointelegraph.com/news/voyager-digital-settlement-ftc">settled with the FTC</a> for $1.65 billion in monetary relief in November 2023. Stark hinted that the NBA should also face criminal charges for its <a href="https://cointelegraph.com/news/nba-sued-promo-links-bankrupt-voyager-digital">alleged role in misleading investors</a>&nbsp;in addition to the civil class-action lawsuit filed on Feb. 6.
Related: <a href="https://cointelegraph.com/news/mark-cuban-to-face-questioning-under-oath-over-promotion-of-voyager">Mark Cuban to face questioning under oath over promotion of Voyager</a>
Voyager’s case in U.S. Bankruptcy Court for the Southern District of New York was ongoing at the time of publication. As of May 2023, a restructuring plan proposed having Voyager customers initially <a href="https://cointelegraph.com/news/voyager-bankruptcy-plan-approved-customers-may-recover-35-7-of-claims-initially">recover 35.7% of their claims</a>&nbsp;in cryptocurrency or cash.
Stark worked as an enforcement attorney with the SEC and headed its Office of Internet Enforcement for a combined 18 years of service. He is currently the president of John Reed Stark Consulting.
Magazine: <a href="https://cointelegraph.com/magazine/hundreds-millions-spent-marketing-crypto-sports-fans-wasted/">Billions are spent marketing crypto to sports fans — Is it worth it?</a>

Former SEC official compares Dallas Mavericks’ Voyager partnership to heroin

Cointelegraph

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