The National Basketball Association (NBA) is currently under fire as investors have initiated legal action in response to the association’s promotional affiliation with the unsuccessful cryptocurrency exchange, Voyager Digital Holdings Inc. Claimants argue that this connection was a significant factor that resulted in roughly $4.2 billion in financial damages.
The details of this lawsuit reveal an intricate web of relationships and dubious business decisions. The NBA’s legal counsel, McCarter & English, has been accused of “gross negligence” for sanctioning a promotional agreement between the NBA, Voyager, and Mark Cuban, the previous owner of the NBA’s Dallas Mavericks.
Following the collapse of Voyager in 2022, investors have since characterized the exchange as both “unregulated and unsustainable.” The lawsuit brought against the NBA concerning its association with Voyager is not isolated; investors had formerly filed a suit against Mark Cuban for publicly endorsing the now-defunct exchange.
While many NBA teams had previously engaged with cryptocurrency and blockchain-related sponsorships, this case exposes the risks and potential backlash faced by large organizations when these deals go awry.
More information about the filed lawsuit and its implications for the NBA can be found here.