NBA Faces Legal Battle Over Cryptocurrency Marketing Ties with Voyager Digital

The National Basketball Association (NBA) is embroiled in a lawsuit due to its marketing affiliations with the now-defunct crypto exchange Voyager Digital Holdings Inc., a move that investors allege caused $4.2 billion in financial losses. Filed in Miami, the lawsuit accuses the NBA of "gross negligence" for its marketing agreement with Voyager and Mark Cuban, the Dallas Mavericks’ former owner, emphasizing the NBA’s role in promoting what investors describe as "an unregulated and unsustainable fraud."

The legal action against the NBA is part of a broader backlash against the crypto industry following high-profile failures, including the collapse of the FTX exchange. Investors have also initiated lawsuits against Voyager’s co-founder Stephen Ehrlich, accusing him of fraudulent operations, and Voyager’s legal advisors, McCarter & English, for allegedly issuing misleading legal opinions that facilitated the exchange’s operations.

The NBA’s involvement is particularly scrutinized due to the league’s and its teams’ promotional efforts, which, according to the lawsuit, contributed to the sale of billions in what are claimed to be unregistered and illegal securities. This situation reflects a growing concern over the endorsement of cryptocurrency ventures by prominent sports entities and personalities, which has already seen legal actions against celebrities like Tom Brady, Steph Curry, and others for their crypto endorsements.

As the legal proceedings unfold, the NBA, along with McCarter & English, faces a significant challenge in defending its actions and decisions related to cryptocurrency promotions. This lawsuit underscores the potential risks and liabilities associated with marketing partnerships in the volatile crypto sector, highlighting the need for rigorous due diligence and regulatory compliance in such endorsements.