The layer-2 (L2) scaling solutions ecosystem is booming. Can crypto achieve scalability without sacrificing decentralization?
The congestion and high transaction fees in established blockchains like Ethereum (ETH) and Bitcoin (BTC) have sparked a need for additional solutions to handle the increased demand. The L2 sidechains such as Arbitrum (ARB), Optimism (OP), and Polygon (MATIC) emerged as an attempt to enhance transaction capabilities while ensuring smooth and orderly operations.
In short, layer-2 solutions are additional protocols or frameworks constructed on existing blockchains to improve scalability and transaction throughput. They come in various forms, such as rollups, state channels, and sidechains.
They alleviate the computational load on the main chain by offloading it to a secondary layer while ideally ensuring security and decentralization.
Optimistic rollups, like Arbitrum and Optimism, take a trust-but-verify stance, treating transactions as valid unless a challenge proves otherwise.
Zero-knowledge rollups, like zkSync, perform calculations away from the main chain and then submit proof that everything checks out.
These solutions accomplish scaling by processing thousands of transactions off-chain and then bundling them into a single transaction on the main chain. This action effectively diverts the transactional load onto their parallel network, easing congestion on the mainnet.
Yet, prominent figures, including Ethereum’s co-creator, Vitalik Buterin, have recently voiced concerns about centralization and censorship in L2 solutions.
Pseudonymous blockchain researcher Andy recently took to X, stating that decentralization had been sidelined for “immediate feedback loops, accessibility, and user acquisition.”
In their opinion, the current L2 stack significantly differs from the idealized version fronted by its backers.
The growing conundrum As the demand for blockchain scalability intensifies, many layer-2 solutions have sprung forth, offering varied approaches to tackle the scalability, security, and speed trilemma.
According to data from layer-2 watchdog L2Beat, there are currently 37 active layer-2 projects with the extensive user, transaction activity, and total value locked (TVL). 36 more are upcoming, and 11 projects have been archived.
Analysts estimate that by the end of the year, there could be more than 100 and even as many as a thousand L2s to address Ethereum’s scalability issues.
Yet, as the ecosystem expands, concerns arise about increasing centralization within these solutions. It’s a paradox: seeking to decentralize but inadvertently embracing centralization.
This concern goes beyond philosophy; it may challenge what makes blockchain robust, transparent, and resistant to censorship.
The L2 solutions offer scalability while potentially compromising the core principles of decentralization. Is this sacrifice necessary, or can we strike a balance that preserves this delicate equilibrium?
Navigating the sequencer dilemma A key component of these L2 networks is the sequencer, which bundles user transactions and sends them to Ethereum.
Sequencers verify, arrange, and compress transactions into a package that can be transported to the layer-1 chain. For this service, they receive a small portion of the fees collected from users.
The technology plays an important role in the functioning of L2s, making them faster, less expensive, and more user-friendly.
Critics argue that today’s sequencers are usually run by centralized entities, representing potential failure points and vectors for transaction censorship. There have also been suggestions that the profitable nature of running sequencers may inadvertently discourage decentralization.
Speaking to crypto.news, Kelsey McGuire, Chief Growth Officer at EVM-based smart contract platform Shardeum, opined that the centralization of some layer-2 platforms could lead to an increased reliance on specific validators and sequencers, creating a scenario where a handful of participants wield disproportionate influence over the network.
Such a scenario could even create rifts in the crypto community between those willing to sacrifice a level of decentralization and those who see themselves as decentralization purists.
In her opinion, sequencers could have transaction ordering, thus creating concerns around front-running or censorship. McGuire suggested exclusively relying on such sequencers could lead to an industry where only a few entities have significant influence, undermining decentralization across the board.
“L2s that do care about decentralization should continue to focus on finding ways to ensure that all the power and influence doesn’t sit within the hands of just a few entities.”
Kelsey McGuire, Chief Growth Officer, Shardeum A recent Binance report also highlighted the risks the current centralized sequencer systems pose, including the potential abuse of transaction order control and the possibility of economic harm to users. For instance, the entire L2 is impacted if a centralized sequencer fails.
Some L2s also lack fraud proofs, although others, including the popular Optimism rollup, are currently developing such systems.
Fraud proofs are layer-1 algorithms that validate the accuracy of layer-2 transactions. Many rollup networks “borrow” Ethereum’s security through these fraud proofs, enabling Ethereum validators to verify that an L2 network is functioning correctly.
Some analysts have suggested that without fraud proofs L2 networks are essentially asking users to trust their security measures instead of Ethereum’s.
I’ve raised the alarm bells about the dangers of L2s being marketed as such without fraud proofs or any meaningful L1 derived security for a very long time.
The response I generally got was “they’re good people. We can trust them to eventually build fraud proofs and not rug in… https://t.co/rbLVIoCShP
— Steven Goldfeder (@sgoldfed) November 22, 2023 Other L2s also lack what experts describe as an “escape hatch” for users to transfer their funds back to Ethereum if a sequencer fails. Without this, there’s a risk of users losing their funds if something goes wrong.
Ethereum’s centralization issues extend beyond L2 centralization. Its transition to the proof-of-stake (PoS) consensus mechanism created new centralization headaches for the network.
Under PoS, network validators are chosen based on the amount of staked ETH they have. It has led to hyper-scale staking platforms such as Lido, which currently houses as much as 20% of Ethereum’s total locked value (TVL) in its liquid staking instrument, the LSD.
Lido also operates one in every three Ethereum validators, leading many to question the excessive dependency on such centralized staking platforms, which ultimately contradicts the Ethereum community’s ethos of decentralization.
The solutions in place Several solutions are being proposed to address these centralization issues. Shared sequencers and direct decentralized sequencers are some of them.
Shared sequencers are networks serving multiple L2s, promoting interoperability and composability. In contrast, direct decentralized sequencing allows each L2 to have its own set of sequencers, allowing for more customization and control.
There are reports that Coinbase and other rollup platforms plan to adopt decentralized sequencers, even as fears abound that large-scale implementation of the technology may compromise speed and security.
L2 platforms like Espresso and Radius are currently developing shared sequencing solutions, each with unique features in their respective architectures.
McGuire, who believes sharing is caring, at least as far as decentralization is concerned, thinks the shared sequencer route may be the best way forward in the L2 space. She feels that a number of the challenges facing L2s could have been negated had the solutions been baked into the underlying L1s from the start.
In his post on the Ethereum Magicians forum, Vitalik Buterin introduced a tiered framework, ranging from stage zero through stage two, to systematically evaluate the level of decentralization inherent in various L2 networks.
This framework acknowledges the practical necessity for nascent L2s to temporarily employ certain centralized mechanisms—akin to “training wheels”—that ensure a secure testing phase and a controlled public roll-out before full decentralization is achieved.
Future horizons As the crypto community grapples with the centralization problem, the future remains uncertain yet hopeful. Innovators actively address these concerns, exploring novel architectures that balance efficiency with decentralization.
The road ahead involves iterative solutions and learning from the successes and pitfalls of existing L2 frameworks.
The conversation is dynamic, evolving alongside the blockchain landscape. The challenge is clear: to forge a path where scalability doesn’t compromise the decentralized ethos.
The community could collaboratively shape the future, steering toward solutions that align with the core principles of blockchain technology.
In the grand narrative of blockchain scaling, the centralization subplot is a critical chapter that will undoubtedly shape the destiny of decentralized networks. The question remains: can we scale without compromising the soul of crypto?
Outspoken Cardano founder Charles Hoskinson surprised Crypto Twitter last week when he announced his “first game is coming out,” alongside a trailer for a game launching on blockchain gaming platform Gala.
When one user asked about it, Hoskinson simply replied, “I have six companies.”
With Voyager: Ascension out today on Gala’s new GalaChain network, now we know a bit more about this particular company—and what Hoskinson’s involvement is.
RFLXT, the company behind the game, told Decrypt that it is an Input Output Global portfolio company, and Hoskinson is the co-founder and CEO of IOG. Hoskinson “doesn't have a position within RFLXT itself,” a RFLXT spokesperson clarified.
(Following publication of this story, Hoskinson tweeted a video in which he says he's a board member at the company and that RFLXT was a "spinout company" from IOG. As previously noted, the studio's PR rep told Decrypt before publication that Hoskinson did not have a position at the company.)
“Our mission at RFLXT is to reinvent what entertainment can be, by launching and combining innovative technologies we haven’t seen combined before,” a spokesperson told Decrypt’s GG via email. “A big focus of our platform is allowing developers and creators (influencers, streamers, etc.) to launch in an environment that’s totally new.”
I have six companies
— Charles Hoskinson (@IOHK_Charles) April 12, 2024
A key strategy for RFLXT is approaching the developers of old PC titles and helping “introduce them to the Web3 world,” they added. This is how Voyager: Ascension came to be. Originally launched in 2018 as Overload, the game hailed from some of the creators of old-school classic shooter Descent. Now it’s been reworked for the crypto world.
“We worked with that team to license the game and introduce features for Web3 audiences,” the RFLXT spokesperson told Decrypt.
Overload is currently available on Steam for $30 with nearly 1,500 very positive reviews. The gameplay looks almost identical to its Web3 counterpart as a fast-paced, sci-fi shooter akin to Quake, albeit in a spaceship. Voyager: Ascension is launching as a purely single-player experience, with a multiplayer mode “coming soon.” Overload has both modes available now.
However, Voyager: Ascension is releasing for free on Gala Games with what the team described as a “very low-priced token season pass” available.
But why GalaChain and not Cardano?
“Helping grow the presence and awareness for games built on Cardano is a major focus for us,” RFLXT told Decrypt’s GG. “But it’s also important to us that RFLXT work with a variety of chains and platforms, as we want to help grow and build the entire space in a new way.”
A core goal for the company is interoperability, as a result RFLXT believes that this partnership with Gala “just made sense,” as “their mission aligns closely with ours.” With that said, the team also confirmed that they are “working with Cardano games” for the RFLXT platform.
“Ultimately, our goal is for our titles to be released in a variety of places,” RFLXT said. “With the special integrations to our Digital Doubles and other RFLXT portal features working across platforms and chains.”
Digital Doubles is an AI-driven product that will enable influencers and streamers to integrate themselves into games. Depending on the title, Digital Doubles will interact with players in a variety of ways, from unlocking special features to being playable characters.
While Voyager: Ascension won’t be integrating this feature, when the RFLXT platform launches “later this summer,” the first full platform title called Chronoshot will integrate Digital Doubles. The team promised “some other titles following that,” with plans to showcase what’s next at August’s Rare Evo conference in Las Vegas.
Edited by Andrew Hayward
Editor's note: This story was updated after publication to include the detail from Hoskinson's tweeted video that he's a board member at RFLXT, which the company did not share when asked prior to publication.
Daily Debrief NewsletterStart every day with the top news stories right now, plus original features, a podcast, videos and more.
FTX and Voyager Digital have secured a $450 million settlement. The agreement, sanctioned by Judge John Dorsey of the United States Bankruptcy Court for the District of Delaware, aims to settle all claims between the two firms. This settlement is part of Voyager’s ongoing efforts to repay creditors following its bankruptcy filing in July 2022.
The terms of the deal were detailed in a court filing on April 29. They include the release of $5 million currently held in escrow by Voyager and an additional $445 million tied to a loan repayment lawsuit from Alameda Research. With this settlement, FTX will relinquish all rights to the funds, facilitating a clearer path for Voyager’s debt repayment strategy.
Both Voyager’s attorney, Paul Hage, and FTX restructuring officer, CEO John Ray III, have formally approved the settlement terms as of April 4. This marks a critical step forward in addressing the claims and financial obligations arising from Voyager’s bankruptcy proceedings.
Voyager Customers to Recover 35.7% of Claims Voyager Digital’s path to compensating its creditors has included multiple significant settlements and claims. In April, the company secured approximately $20 million from Three Arrows Capital and about $14 million from Directors and Officers Insurance. These funds are part of a broader strategy to manage and distribute assets to affected parties.
A restructuring plan proposed in May 2023 suggested that Voyager customers might recover 35.7% of their claims, whether in crypto or fiat currency. This plan is part of a series of measures designed to stabilize the firm’s financial standing and provide restitution to its users and investors.
Genesis, Gemini Settle with SEC for $21M The settlement comes amid ongoing legal challenges for entities within the cryptocurrency market. Notably, in October 2023, the U.S. Commodity Futures Trading Commission and the Federal Trade Commission filed lawsuits against Voyager’s former CEO, Stephen Ehrlich. These lawsuits address allegations of fraudulent statements made by Ehrlich, and the cases were still pending at the time of this report.
Additionally, a related lawsuit involving Genesis and Gemini culminated in a $21 million settlement with the SEC. This settlement, approved by a New York federal judge, pertains to charges that Genesis Global Capital sold unregistered securities through the Gemini Earn program. The SEC will receive the penalty upon the bankruptcy court’s confirmation of all claim payments, including those to retail investors involved in the program.
Read Also: US SEC Slammed By Lawmaker Over Misleading Ethereum Security Tag
SponsoredUpdated May 8, 2024, 5:29 p.m. Published May 7, 2024, 5:59 p.m.
2 min read
Former New England Patriots and Tampa Bay Buccaneers tight end Rob Gronkowski will pay $1.9 million to settle claims brought against him by former customers of Voyager Digital, a cryptocurrency lender.
The settlement, which is still subject to approval by the court overseeing the civil lawsuit, will see the National Football League star known as "Gronk" pay into a $2.4 million pool alongside National Basketball Association player Victor Oladipo and racecar driver Landon Cassill, according to a court filing dated May 3.
Gronkowski became a "brand ambassador, Voyager shareholder" and holder of Voyager's VGX token in September 2021, a company press release announced at the time.
Voyager filed for bankruptcy in 2022.
A group of Voyager investors sued Dallas Mavericks owner Mark Cuban and other Voyager promoters that same year, adding Gronkowski and other promoters last year. The investors announced they had reached a deal with Gronkowski in February. Last week's filing saw the Voyager investors announce that they were ready to proceed with "the first trance of proposed Class Settlements," which were made with Gronkowski, Oladipo and Cassill.
"Plaintiffs have now settled with Voyager promoters Cassill, Gronkowski, and Oladipo for millions of dollars in relief to the class leaving Co-Defendants Mark Cuban and the Dallas Mavericks as the remaining Defendants for trial in November 2024," the filing said.
According to an accompanying exhibit, Gronkowski will pay $1.9 million, Oladipo will pay $500,000 and Cassill will pay $25,000 to settle the claims. If the court approves the settlement, the claims against the three will be dismissed.
Coincidentally, the investors filed the proposed settlement with the court just two days before former NFL quarterback Tom Brady – Gronkowski's former teammate – participated in a comedic roast, which saw several comedians and other stars comment on Brady's previous crypto endorsements, though without mentioning FTX, Sam Bankman-Fried's defunct exchange Brady promoted.
Comedian Kevin Hart joked that the roast was taking place at the Kia Forum and not the Crypto.com Arena to avoid reminding people Brady owed them money, while fellow comedian Nikki Glaser took a more pointed approach.
"Tom also lost $30 million in crypto. Tom, how did you fall for that? I mean, even Gronk was like, 'Me know that not real money,'" she said.
Former NFL Star Rob Gronkowski must pay $1.9 million to settle a crypto investor lawsuit. The settlement is subject to approval by the court overseeing the lawsuit. The claims were brought against him by former customers of Voyager Digital, a cryptocurrency lender.
Former NBA All-Star Victor Oladipo and racecar driver Landon Cassill also struck deals with Voyager digital customers. Gronkowski became an ambassador for the crypto company in 2021. In addition, he was also a shareholder and holder of the company’s VGX token, which he advertised to his millions of fans across social media. Voyager filed for bankruptcy in 2022.
Upon the company filing for bankruptcy, a group of investors sued Mark Cuban and other Voyager promoters. This includes Gronkowski, Oladipo, and Cassill in 2023. A deal was reached between Gronkowski and the investors in February, and the settlement total has officially been announced. Furthermore, Rob Gronkowski is contributing $1.9 million to a pool totaling $2.4 million for investors for the crypto lawsuit.
Also Read: Chainlink Weekly Price Prediction: Can LINK Hit $15?
“Plaintiffs have now settled with Voyager promoters Cassill, Gronkowski, and Oladipo for millions of dollars in relief to the class leaving Co-Defendants Mark Cuban and the Dallas Mavericks as the remaining Defendants for trial in November 2024,” the settlement filing states. According to an accompanying exhibit, Gronkowski will pay $1.9 million, Oladipo will pay $500,000 and Cassill will pay $25,000 to settle the claims. Upon court approval of the settlement, the court will dismiss the lawsuit.
In a recent development, three prominent American sports personalities have agreed to collectively pay $2.42 million to settle accusations of promoting the now-bankrupt cryptocurrency exchange Voyager Digital.
Retired NFL star Rob “Gronk” Gronkowski, NBA player Victor Oladipo, and NASCAR driver Landon Cassill have reached settlements without admitting to or denying the allegations.
TLDR Table of Contents
TLDROladipo and Cassill Also ContributeAttorney Fees and Settlement ScopeMark Cuban Remains a Defendant Rob Gronkowski, Victor Oladipo, and Landon Cassill agree to pay $2.42 million to settle allegations of promoting failed cryptocurrency exchange Voyager Digital. Gronkowski will pay the largest share of $1.9 million, while Oladipo will pay $500,000 and Cassill will pay $25,000. The proposed settlement includes all U.S. individuals who enrolled in a Voyager Earn Program Account or purchased VGX tokens from October 2019 to the preliminary approval date. Plaintiffs plan to ask for an award of attorney fees of roughly $792,000 in addition to approving the $2.4 million settlement. The main defendant named in the class action lawsuit is Dallas Mavericks minority owner Mark Cuban, with Gronkowski and other Voyager promoters added in 2023. Of the three athletes, Gronkowski will be paying the lion’s share of the settlement, amounting to $1.9 million. The former New England Patriots tight end had become a Voyager partner, brand ambassador, shareholder, and VGX tokenholder in September 2021.
His sincere empathy for his fans, despite losing money with Voyager himself, has been cited as a key reason for his willingness to settle.
Oladipo and Cassill Also Contribute NBA All-Star Victor Oladipo has agreed to pay $500,000, while NASCAR driver Landon Cassill will contribute $25,000 to the settlement pool. The total settlement of $2.42 million will provide relief to U.S. individuals who enrolled in a Voyager Earn Program Account or purchased VGX tokens from October 2019 to the preliminary approval date.
Attorney Fees and Settlement Scope In addition to the $2.4 million settlement, plaintiffs plan to request an award of attorney fees amounting to approximately $792,000. The settlements were negotiated through mediation, aiming to resolve the issues of whether Voyager products were unregistered securities and if the promoters solicited investors.
Mark Cuban Remains a Defendant While Gronkowski, Oladipo, and Cassill have settled, the main defendant in the class action lawsuit remains Dallas Mavericks minority owner Mark Cuban. The billionaire was scheduled to be deposed in February as part of his defense in the lawsuit. The trial against Cuban and the Dallas Mavericks is set for November 2024.
Oliver Dale
Editor-in-Chief of Blockonomi and founder of Kooc Media, A UK-Based Online Media Company. Believer in Open-Source Software, Blockchain Technology & a Free and Fair Internet for all. His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More. Contact [email protected]
Recently, prominent figures in American sports took a significant step in a lawsuit against Voyager Digital. Retired NFL star Rob “Gronk” Gronkowski, NBA player Victor Oladipo, and NASCAR driver Landon Cassill collectively reached a $2.42 million settlement to resolve allegations of their roles in promoting Voyager Digital.
What Are the Details of the Payments?According to the class action settlement filed on May 3, Gronkowski will pay the largest portion, amounting to $1.9 million. Oladipo will pay $500,000, and Cassill will contribute $25,000. All three sports stars accepted the settlement without admitting or denying the accusations.
This settlement proposal covers all US individuals who registered for a Voyager Earnings Program Account or purchased VGX tokens before October 2019. In addition to approving the $2.4 million settlement, the plaintiffs plan to request approximately $792,000 in attorney fees.
In 2021, Gronkowski launched an NFT collection and became a partner, “brand ambassador”, shareholder, and owner of VGX tokens at Voyager. The legal representative for the investors, Adam Moskowitz, stated that the athletes’ intentions to settle stemmed from a genuine desire to help their fans. Moskowitz noted, “Despite losing money with Voyager, Gronk developed sincere empathy for all his fans.”
Background of the LawsuitA group of investors filed a class action lawsuit against Dallas Mavericks owner Mark Cuban in 2022, and later, in 2023, included Rob Gronkowski and other Voyager endorsers in the lawsuit process. The lawsuit primarily focused on whether Voyager products were unregistered securities and whether the endorsers misled investors.
Throughout the lawsuit, several settlements were reached through mediation between the parties. These agreements aimed to resolve uncertainties in the industry and facilitate reconciliation among the parties. Particularly, efforts were made to correct market turmoil following Voyager Digital’s bankruptcy filing, events like the collapse of Terra/Luna in May and the default on loans given to the Three Arrows Capital hedge fund caused significant upheaval in the sector.
However, in April, Voyager Digital took a significant step by providing $484 million to compensate its creditors. This funding was obtained through settlements with FTX, Three Arrows Capital, and Directors and Officers (D&O) insurance claims.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
Three prominent American athletes have reportedly agreed to pay a collective settlement of up to $2.42 million in an ongoing promotion Voyager lawsuit. The trio, identified as retired NFL star Rob “Gronk” Gronkowski, NBA’s Victor Oladipo, and NASCAR driver Landon Cassill, alleged played huge roles in promoting the now-bankrupt crypto exchange Voyager Digital.
According to court documents, the retired Gronkowski will take the biggest part of the settlement with a payment of $1.9 million. The former New England Patriots tight end partnered with Voyager as a brand ambassador in September 2021. The partnership also saw him become a shareholder in the company as well as a VGX tokenholder.
However, despite losing a sizeable amount of money to Voyager himself, it is believed that Gronkowski’s sincere empathy for his followers and fans is the reason behind his willingness to settle.
NBA player Victor Oladipo will also be contributing $500,000 to the settlement pool, while Cassill will pay the smallest share of $25,000.
The total settlement of $2.42 million is expected to provide relief to the US individuals who enrolled in a Voyager Earn Program Account or purchased VGX tokens from October 2019 to the preliminary approval date. While all three of them have agreed to the terms of the filing, it might be worth noting that they did not exactly admit to the accusations of the plaintiffs.
Meanwhile, other than the amount that the trio has agreed upon, plaintiffs are looking at an additional fee of about $792,000 that will cover the attorneys’ cost.
Main Defendant Remains in Voyager Lawsuit Gronkowski, Oladipo, and Cassill may have settled, but the main defendant in the class action lawsuit remains Dallas Mavericks minority owner Mark Cuban. Back in 2022, a group of investors initially filed a class action against Cuban only. However, things took a different turn when the plaintiffs added Gronkowski and other Voyager promoters in 2023. The trial against Cuban and the Dallas Mavericks is set for November 2024.
Notably, the agreed settlements were carried out through a mediation that was set to achieve two things. Firstly, it aimed to establish whether Voyager products were unregistered securities. It also sought to know if the promoters solicited investors or not.
Voyager Digital filed for bankruptcy in July 2022 following Terra’s crash that had an industry-wide effect. In April, however, the failed platform made some reasonable progress in its bid to compensate its creditors. It was able to raise $474 million through settlements with FTX, Three Arrows Capital, and Directors and Officers (D&O) insurance claims.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.
Gronkowski, Oladipo, and Cassill to pay $2.4 million in Voyager lawsuit. The settlement underscores regulatory challenges and investor protection concerns. In a surprising crossover of sports and finance, Rob Gronkowski, a retired football star, Victor Oladipo, an NBA player, and Landon Cassill, a NASCAR driver, find themselves at the center of a legal settlement.
The case involves allegations linked to the promotion of the failed cryptocurrency exchange Voyager Digital Holdings Inc.
Who’s to be blamed? According to a court document, the trio has collectively agreed to pay $2.4 million to settle the claims, with Gronkowski taking up the largest share of $1.9 million. The statement added,
“All settling defendants have to provide collectively $2,425,000 in monetary relief.”
The settlement, achieved without admission or denial of the allegations, has sparked discussions within both the sports and cryptocurrency communities.
It covers U.S. individuals who joined Voyager Earn or bought VGX Tokens from the 23rd of October, 2019.
In response to the aforementioned allegations, Adam Moskowitz of The Moskowitz Law Firm, representing the investors, stated to Law360 on the 7th of May that the settlements primarily stem from the athletes’ desire to assist their fans.
He said,
“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.”
Praising the U.S. District Judge Roy K. Altman, Moskowitz added,
“We also are grateful to [U.S. District Judge Roy K. Altman], who has carefully presided over our litigation, and we are hopeful to reach additional settlements with other defendants in the future.”
The real culprit Though Gronkowski, Oladipo, and Cassill are defendants, the lawsuit also targets Dallas Mavericks owner Mark Cuban. Investors allege deception in buying unregistered securities with false promises of profits.
Related lawsuits against the NBA, McCarter & English, and Ketchum Inc. have also been merged into the main case.
Moreover, Voyager’s Chapter 11 filing in July 2022, amidst financial turmoil and unsuccessful sale attempts to FTX and Binance [BN] US, has added complexity to this legal situation.
As investors navigate these complexities with legal representation, the outcome of this litigation will undoubtedly shape the trajectory of cryptocurrency regulation and investor protection.
Jimmy has nearly 10 years of experience as a journalist and writer in the blockchain industry. He has worked with well-known publications such as Bitcoin Magazine, CCN, and Blockonomi, covering news...
Has Also Written
Last updated:
May 8, 2024
Three American sports personalities, Rob Gronkowski, Victor Oladipo, and Landon Cassill, agreed on May 3 to collectively pay $2.42 million to settle allegations related to the Voyager promotion case.
The settlement involving the trio’s promotion of the defunct crypto exchange Voyager Digital provides a detailed look at the financial implications and legal aspects of their involvement.
Retired NFL icon Gronkowski agreed to pay the highest amount, $1.9 million. OKC Thunder Guard Oladipo settled for $500,000, while NASCAR driver Cassill agreed to pay $25,000.
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
In addition to the settlement, the plaintiffs are also seeking $792,000 in attorney fees.
Unlike the other defendants, Gronkowski was more involved with Voyager. The NFL player was a partner, VGX token holder, shareholder, and ambassador for the exchange.
According to court documents, the settlement was negotiated through mediation aimed to discover whether Voyager’s products were unregistered securities and if the promoters improperly solicited investors.
Voyager Digital filed for bankruptcy in July 2022 due to severe market turmoil triggered by the Terra/Luna collapse in May 2022 and the default of loans to the Three Arrows Capital (3AC) hedge fund. This series of events ultimately led to the exchange’s downfall.
In April 2024, however, Voyager took steps towards compensating creditors by securing $484 million through settlements with FTX, Three Arrows Capital, and Directors and Officers (D&O) insurance claims. The settlement, including interest, covers around 25% of Voyager creditors’ total claims and is expected to be distributed soon.
Alongside the FTX agreement, Voyager has secured a claim of about $675 million from its ongoing litigation with Three Arrows Capital. Within this sum, $20.43 million constitutes Voyager’s share of the initial distribution from 3AC.
Will Mark Cuban Settle? While the sports personalities have agreed to settle the case, the main defendant has yet to come to the table.
In 2022, a class action was filed against Mark Cuban, the minority owner of the Dallas Mavericks. In 2023, the other sports influencers were added to the suit.
The sports billionaire’s trial is scheduled to begin in November 2024 for his involvement in promoting Voyager’s Earn Program Accounts (EPAs), which were classified as unregistered securities.
Voyager Digital Class Action Lawsuit: Defendants Robert Gronkowski, Victor Oladipo & Landon Cassill settle for combined $2,425,000. ~33% Attorney fees leave $1.62 million. Motion not finalized. Still lawsuits against Mark Cuban, Dallas Mavericks, NBA, McCarter & English & Ketchum pic.twitter.com/9EbVrDZHAM
— JDW_007 (@007_jdw) May 4, 2024
The NBA and Cuban are also facing a lawsuit for alleged “gross negligence” in their marketing partnership with the defunct crypto exchange. The trial against Cuban and the Dallas Mavericks is set for November 2024.
NBA’s decision to support the partnership between Voyager Digital and the Dallas Mavericks has elicited criticisms as a former SEC official suggested an NBA ban on crypto sponsorships.
Three co-defendants and sports stars in the Voyager Digital lawsuit have agreed to settle with the victims However, Mark Cuban and his team haven’t settled, which could see them face trial in November Mark Cuban could face trial in November 2024 after failing to settle claims in the ongoing Voyager Digital crypto-linked class action suit.
Unlike Cuban, other sports stars linked to the lawsuit like Rob Gronkowski, Victor Oladipo, and Landon Cassill, have opted to settle the claims linked to Voyager Digital’s promotion, collectively agreeing to pay $2.4 million.
Should the court greenlight the aforementioned settlement, Mark Cuban and his team will be the only ones left to proceed for trial later in the year, as captured by the filing,
“Plaintiffs have now settled with Voyager promoters Cassill, Gronkowski, and Oladipo for millions of dollars in relief to the class, leaving Co-Defendants Mark Cuban and the Dallas Mavericks as the remaining Defendants for trial in November 2024.”
Voyager Digital and Mark Cuban’s woes Like the settled trio, billionaire Mark Cuban and his basketball team, Dallas Mavericks, signed a five-year promotion arrangement with Voyager Digital in 2021. Given his influence and Maverick’s fanbase, Voyager Digital attracted several customers.
However, things went south after the firm’s bankruptcy in 2022, and investors lost money. This led to a class action lawsuit by the affected customers. The victims claim that Cuban’s promotion affected 3.5 million of them, with the plaintiffs collectively losing over $5 billion.
For perspective, the sports star Rob Gronkowski had an extensive arrangement with the defunct crypto-firm, including a brand ambassador and token holders. His extensive involvement in the promotion saw him cough $1.9 million as part of the settlement, higher than Oladipo and Cassill.
That being said, it remains to be seen whether Mark Cuban will seek a settlement or opt for the trial scheduled for November 2024. Even so, the development is a stark reminder of the risky side of endorsing crypto-firms by influential public figures.
Binance, a leading cryptocurrency exchange, announced the delisting of six altcoins—PowerPool (CVP), Ellipsis (EPX), ForTube (FOR), Loom Network (LOOM), Reef (REEF), and VGX Token (VGX). This led to sharp price drops for each token.
Starting August 26, 2024, at 03:00 UTC, Binance will halt all spot trading for these tokens and cancel any existing orders.
Deposits for these altcoins will not be accepted after August 27, 2024, but withdrawals will be allowed until November 26, 2024. Binance may later convert these tokens into stablecoins, though this is not guaranteed.
Additionally, Binance will automatically convert 15 previously delisted altcoins into the USDC stablecoin based on user holdings as of September 2, 2024, to provide a stable value.
These altcoins include Bitcoin Gold (BTG), Bitcoin Standard Hashrate Token (BTCST), Bitshares (BTS), District0x (DNT), Groestlcoin (GRS), Hegic (HEGIC), MobileCoin (MOB), Monero (XMR), Monetha (MTH), Multichain (MULTI), Navcoin (NAV), Sologenic (SOLO), Spartan Protocol (SPARTA), Symbol (XYM), and Tribe (TRIBE).
