Mark Cuban is in hassle.
The billionaire entrepreneur has been dealing with a torrent of criticism for a number of days linked to a partnership solid with a crypto agency. Indeed, Cuban, an evangelist of the crypto business through which he has invested, had signed an settlement linking his NBA crew, the Dallas Mavericks, to the crypto lender Voyager Digital final October.
The contract, signed on October 28, is for 5 years and has a mission to advertise cryptocurrencies by making cash extra accessible by instructional and digital applications.
$100 Reward When Opening an Account
As a part of the partnership, Voyager promised Dallas Mavericks’ followers a $100 reward to commerce crypto on Voyager for a restricted time in the event that they deposited $100 and traded simply $10. The supply had met with nice success, a lot in order that Voyager had been obliged to arrange a ready listing.
“We’re going to come up with new ways to introduce Mavs fans to cryptocurrency and help them understand it,” Cuban stated on the time throughout a press convention with Voyager CEO Steve Ehrlich. “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.”
The problem is that less than nine months later, Voyager Digital filed for bankruptcy. And for the moment it is difficult to know if his customers will recover their money. Indeed, the firm is one of the collateral victims of the crisis of confidence having wiped out more than $2 trillion from the crypto market since all-time highs were set in November.
Voyager is a cryptocurrency trading platform. The firm also offers loans and staking services, which are a kind of rewards for holding certain coins. It was its lending business that got it into trouble: Voyager appears to have loaned its clients’ funds to crypto hedge fund Three Arrows Capital, also known as 3AC. However, this fund defaulted last month on a loan of $667 million granted to it by Voyager. Three Arrows Capital has been forced by a court in the British Virgin Islands to enter into liquidation. Faced with this disaster, Voyager suspended deposits, withdrawals and loyalty rewards on its platform.
“Customers with crypto of their account(s) will obtain in trade a mixture of the crypto of their account(s), proceeds from the 3AC restoration, widespread shares within the newly reorganized Company, and Voyager tokens,” Ehrlich wrote on Twitter on July 6.
Voyager ‘Is a Good Way to Learn’
On October 28, Voyager Digital shares closed at $14.21. In its last session this week before delisting at the company’s request, Voyager stock was trading at 25 cents per share.
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“You’re spending your money, so always be careful,” Cuban said at the press conference last October when asked what you need to know before the first investment in the crypto sector. “But the opposite factor, look, there’s investments, issues like Shiba Inu and Dogecoin, these aren’t investments. But Voyager … it is a good technique to study and it’s one thing you are able to do in your good cellphone. You can begin entering into this and saving your cash and that’s only a distinctive alternative.”
Shiba Inu and Dogecoin are two meme coins that were created as a joke.
Cuban’s words and this partnership now come back to haunt him because many retail investors claim to have invested in Voyager or to have gone through the platform for their first investments in the crypto sector after the partnership with the Dallas Mavericks. These investors are expressing their anger on social social media.
“So we received rugged by @mcuban twice?” posted one Twitter user.
“@mcuban @costplusdrugs Don’t belief Cuban. I misplaced every little thing in his “partnership” with Voyager,” another user complained. “He says he isn’t in it for the cash and solely prices 10-15% after prices. That’s 9 figures for each Billion. That’s not somebody who “isn’t in it for the money!”I’m ruined because of him.”
“@mcuban I made certain to say that you simply steered I take advantage of @investvoyager for my crypto trade. 👍” complained another user.
“@mcuban is stuffed with rugs 👀,” one other stated.
Cuban, who has a social media presence and has retweeted messages from users praising his efforts to drive down drug costs, has yet to discuss Voyager’s bankruptcy.
A Twitter request for comment from the Dallas Mavericks has so far gone unanswered.
“In 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 in an interview last month with Fortune. “Like [Warren] Buffett says, ‘When the tide goes out, you get to see who is swimming naked.”
Source: www.thestreet.com”