Amidst the tumultuous landscape of the cryptocurrency industry, a significant legal resolution has emerged involving three high-profile American sports stars and their promotional ties to the now-defunct cryptocurrency exchange, Voyager Digital.
Rob “Gronk” Gronkowski, Victor Oladipo, and Landon Cassill have collectively agreed to pay $2.42 million to settle allegations that they helped promote the failed platform.
TLDR
- Rob Gronkowski, Victor Oladipo, and Landon Cassill have agreed to pay $2.42 million collectively to settle allegations that they promoted the failed cryptocurrency exchange Voyager Digital.
- Gronkowski will pay the largest share of $1.9 million, Oladipo will pay $500,000, and Cassill will pay $25,000.
- The settlement includes all U.S. individuals who enrolled in the Voyager Earn Program Account or purchased VGX tokens from October 2019 to the preliminary approval date.
- Plaintiffs also plan to ask for attorney fees of around $792,000 in addition to the $2.4 million settlement.
- The settlements aim to resolve two key issues: whether Voyager products were unregistered securities and whether the promoters solicited investors.
The settlement, filed on May 3, outlines the specific contributions from each party. Gronkowski, a retired NFL star and prominent figure in the crypto space, will shoulder the largest portion, paying $1.9 million.
Oladipo, an NBA player, will contribute $500,000, while NASCAR driver Cassill will pay $25,000. Notably, all three athletes have agreed to the settlements without admitting or denying any of the accusations leveled against them.
The proposed settlement encompasses a broad range of individuals who were impacted by Voyager Digital’s operations.
It includes all U.S. citizens who either enrolled in the Voyager Earn Program Account or purchased VGX tokens, the company’s native cryptocurrency, between October 2019 and the date of preliminary approval for the settlement.
In addition to the $2.4 million settlement amount, the plaintiffs also intend to seek an award of attorney fees, estimated to be around $792,000.
This request is a common practice in class-action lawsuits, as it helps cover the legal costs incurred by the plaintiffs’ legal team throughout the proceedings.
GRONKOWSKI AND OTHERS TO SETTLE CRYPTO INVESTOR SUIT FOR $1.9M
– Former NFL star Rob Gronkowski agrees to pay $1.9 million to settle claims from former customers of Voyager Digital, a cryptocurrency lender.
– The settlement, subject to court approval, involves Gronkowski, NBA… https://t.co/jcP9n0sXnz pic.twitter.com/hBnaiiACwB
— BSCN (@BSCNews) May 7, 2024
The settlements were reached through mediation, a process aimed at resolving two critical issues at the heart of the case. Firstly, the mediation aimed to determine whether the products offered by Voyager Digital constituted unregistered securities.
Secondly, it sought to establish whether the celebrity promoters actively solicited investors to participate in Voyager’s offerings.
Gronkowski’s involvement with Voyager Digital dates back to September 2021, when he assumed multiple roles, including partner, brand ambassador, shareholder, and VGX tokenholder.
His NFT collection, launched in 2021, further cemented his presence in the crypto sphere.
Adam Moskowitz, the legal representative for the investors, attributed the successful settlements to the athletes’ genuine desire to assist their fans.
“Gronk had a sincere empathy for all of his fans, even though he lost money with Voyager as well. It is no surprise he continues to be such a trusted and respected spokesperson,” Moskowitz told Law360.
The class-action lawsuit initially targeted Mark Cuban, the owner of the Dallas Mavericks, in 2022. However, it later expanded to include Gronkowski and other Voyager promoters in 2023, underscoring the widespread implications of the company’s collapse.
Voyager Digital’s downfall came in July 2022 when the company filed for bankruptcy, citing the market turmoil caused by the Terra/Luna collapse in May and the default of loans to the Three Arrows Capital (3AC) hedge fund.
However, in April 2023, Voyager Digital made progress toward compensating its creditors by securing $484 million through settlements with FTX, Three Arrows Capital, and Directors and Officers (D&O) insurance claims.
The settlement reached between Gronkowski, Oladipo, Cassill, and the plaintiffs represents a significant step in resolving the legal implications surrounding Voyager Digital’s collapse and the role of celebrity endorsements in the cryptocurrency industry.
