Mark Cuban faces class action lawsuit for promoting Voyager crypto products
The lawsuit alleged Voayger depended heavily on Mark Cuban’s vocal support and monetary investment in order to sustain itself.

Mark Cuban, the billionaire entrepreneur who has been quite active in the crypto ecosystem for the past year, is facing a class-action lawsuit over his promotions of the bankrupt crypto brokerage firm Voyager Digital.

The Moskowitz Law Firm filed a civil suit in the United States District Court in Southern Florida against Cuban for promoting Voyager’s unregulated crypto products. The lawsuit demanded a jury hearing for the case.

The lawsuit alleged Cuban also misrepresented the firm on numerous occasions, making dubious claims of it being cheaper than competitors and offering “commission-free” trading services. Cuban, along with Voyager Digital CEO Stephen Ehrlich, leveraged their years of experience to lure inexperienced customers into investing their life savings in what they called a Ponzi Scheme, the lawsuit alleges

An excerpt from the lawsuit read:

“Cuban and Ehrlich, went to great lengths to use their experience as investors to dupe millions of Americans into investing—in many cases, their life savings—into the Deceptive Voyager Platform and purchasing Voyager Earn Program Accounts (‘EPAs’), which are unregistered securities.”

The lawsuit further alleged that Cuban continued to hype Voyager’s products and push retail investors to invest in it despite knowing it. Cuban went on record calling the Voyager platform “as close to risk-free as you’re gonna get in the crypto.” The lawsuit read:

“Voyager Platform relied on Cuban’s and the Dallas Maverick’s vocal support and Cuban’s monetary investment in order to continue to sustain itself until its implosion and Voyager’s subsequent bankruptcy.”

Voyager was one of many crypto lenders to Three Arrows Capital (3AC) that went bust after laters insolvency. The crypto lending firm paused trading activity and withdrawals on July 1 and eventually filed for chapter 11 bankruptcy on July 5. Currently, over 3.5 million American customers have nearly 5 billion dollars in cryptocurrency assets on the platform frozen.

Voyager was cleared to return $270 million in customer funds held at the Metropolitan Commercial Bank (MCB) by the judge presiding over its bankruptcy proceedings in New York. A day later, the lending firm announced that clients with U.S. dollars in their accounts could withdraw up to $100,000 in a 24-hour period starting as early as Aug. 11, with the funds received in 5–10 business days.

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OpenSea introduces new stolen item policy to combat NFT theft
NFT marketplace OpenSea is expanding the use of police reports to verify stolen item reports within its platform.

As asset theft remains one of the biggest headaches in the nonfungible token (NFT) space, NFT marketplace OpenSea is making an effort to tailor its policy to incorporate additional measures against stolen items.

In an announcement, the firm highlighted that its policies were made considering United States laws, where knowingly allowing the sale of stolen items is prohibited. However, the marketplace admitted that in some cases, buyers who unknowingly bought stolen items were penalized even though they were not at fault. Because of this and the NFT community’s feedback, the marketplace has adjusted its policy to expand the use of police reports.

Previously, police reports were used within the platform in escalated disputes. With the new update, they will be used to confirm all stolen item reports within the NFT platform. Without a police report within seven days, the platform will enable the buying and selling of the reported item again to avoid fake reports. Following this, the company has also made efforts to ease the process of re-enabling the buying and selling features once the stolen items are recovered.

The NFT platform also highlighted that it’s working to find other solutions to tackle the problem of NFT theft at its roots. According to the announcement, the company is working on automating threat and theft detection.

A Twitter user praised the move, describing it as a good first step and encouraged other platforms to follow suit while suggesting the consideration of the nuances of laws from other countries as well. On the other hand, some community members are still disgruntled, taking to Twitter to report their issues.

Meanwhile, another user claimed that they had purchased a stolen NFT unknowingly, and the support staff at OpenSea recommended that the user sell it on another NFT marketplace.

In June, the NFT platform enabled additional security features to protect its users from NFT scams. The feature hides NFT transfers that are flagged as suspicious automatically. The goal of this is to ensure that only legitimate transactions are visible in the marketplace.

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Coinsquare chief operating officer shares thoughts on being the first regulated crypto dealer exchange in Canada
Crypto exchanges in Canada have until mid-2023 to register with regulators or face enforcement action.

It's a story that still haunts the early generation of Canadian crypto users to this day. Four years prior, Gerald Cotten, co-founder of Canada's then-largest cryptocurrency exchange QuadrigaCX, died under mysterious circumstances in India. But, before his passing, Cotten took virtual keys for digital wallets and moved them into cold storage, leading to the permanent loss of $190 million in user funds.

The incident triggered a crisis of confidence in the country's emerging crypto sector and made regulators deeply skeptical of blockchain technology. However, old wounds eventually heal. Fast forward to today, and Coinsquare has taken over to become one of Canada's largest crypto exchanges, with $8 billion in cumulative trading volume since 2014.

In an interview with Cointelegraph business editor Sam Bourgi, Coinsquare chief operating offic Eric Richmond explained that a regulatory framework now exists to prevent similar incidents in the future:

“We've taken a much different approach than the U.S. Unlike firms south of the border, all crypto trading platforms here need to be registered with the Investment Industry Regulatory Organization of Canada (IIROC). There is a backlog with processing applications at the moment, while we had ours submitted from back in Nov. 2020 as we wanted to be one of the first regulated players out there.”

As the regulation only came into force recently, all crypto exchanges are given a two-year exemption where they must register with the IIROC during this period. Currently, Coinsquare is the only firm in the space that is IIROCregistered. Similarly, the company has a strict set of rules in place when it comes to listing new tokens to ensure its users do not fall victim to scams:

“We put it through evaluating the underlying technology, the marketing, the team behind it, analyzing potential legal issues, irregular price movements, etc. We go through his in-depth analysis across different teams, such as compliance, business, legal, and security. It's about genuinely understanding the token. And if it passes the tests, then the listing threshold is set."

Canadian regulators have taken a harsh stance on exchanges allegedly not abiding by the new rules. In March, Binance ceased operations in the province of Ontario and admitted to the Ontario Securities Commission (OSC) that it was unregistered there. Similarly, the OSC took enforcement action against cryptocurrency exchanges KuCoin and Bybit, claiming a violation of securities laws.

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This Daily Dose was brought to you by Cointelegraph.

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