Stuart Z. Grossman and Rachel Furst, partners of Grossman Roth Yaffa Cohen, along with Adam M. Moskowitz, managing partner at the Moskowitz Law Firm, filed a class action complaint against cryptocurrency broker Voyager Digital on behalf of a Florida client, Mark Cassidy, who alleges the broker misled platform users by charging hidden fees and falsely promising large profits. The lawsuit was filed Dec. 24, 2021 in a Miami federal court.
“The investing world is depending upon cryptocurrency brokers to be governed and self-governed as would the best traditional investment brokers and their firms” Grossman says, “Just because crypto is its own universe and not easily understood does not make it a playground for taking advantage of its investors trust and money.”
Grossman Roth Yaffa Cohen took care to include in the lawsuit expert preliminary analyses by Richard Sanders, CipherBlade co-founder and lead investigator, and Stephen Castell, Castell Consulting chairman. According to Mr. Castell’s numbers, the proposed class action suit could be worth over $1 billion in compensation for Voyager platform users.
After Robinhood and other brokerages fell under fire earlier this year, many crypto investors decided to move to Voyager, an app that claimed to be “100% commission-free.” Mr. Cassidy was among those who made the switch, specifically from Robinhood to Voyager.
Mr. Cassidy found the allegations against Robinhood troubling: The U.S. Securities and Exchange Commission (SEC) claimed the broker had failed to inform investors that it sold stock orders to other trading firms, which “led to client trades being executed at prices inferior to those of competing brokers,” as reported by Bloomberg.
It wasn’t long before Mr. Cassidy started to suspect Voyager might be taking advantage of its platform users, but through hidden fees. Voyager’s wide bid-ask spreads—the difference between the highest bid a buyer is willing to make and the lowest bid a seller is willing to accept—set off alarm bells.
“They’re basically ripping people off small pieces at a time,” Mr. Cassidy alleged in conversation with Bloomberg.
In addition to hidden fees, allegations in the class action against Voyager also center around a purported practice of “Capitalizing on their customers’ naivete.” The lawsuit cites Mark Cuban’s recent announcement of a five-year partnership between the Dallas Mavericks (his basketball team) and Voyager.
“My now 12-year-old son got me in Dogecoin when it was less than a penny,” Mr. Cuban said in a press conference with Voyager president and chief officer Steve Ehrlich. “I was like ‘let’s do this’ because it’s a cheap way for him to learn how all of this works. While you have to put in a $100 to get the $100 bonus the next two days, if you don’t have a hundred dollars and you just want to download the app and put in $5 and buy SHIBA INU (SHIB) and Dogecoin (DOGE), there’s a lot of ways to inexpensively start.”
Per the lawsuit, the press conference with Mr. Cuban and Mr. Ehrlich is evidence of how Voyager targets “unsophisticated investors with false and misleading promises of reaping large profits in the cryptocurrency market.”
Standing Up to Predatory Crypto Brokers
Backed by over 30 years of legal experience, our South Florida trial lawyers have established a track record of success. We have utilized both legal acumen and top-tier advocacy skills to recover millions of dollars in compensation for those wronged by others, including large companies and corporations.
Attorneys Grossman and Furst are particularly skilled in litigating class action lawsuits. For example, Attorney Furst was recently appointed to serve as liaison counsel for plaintiffs in the January 2021 Short Squeeze Trading Litigation against Robinhood, TD, Ameritrade, E*TRADE, and dozens of other companies.
If you have suffered losses due to hidden fees and misleading marketing practices, we are prepared to represent you. Call (866) 629-1061 or reach us online to schedule a free consultation with a seasoned South Florida trial attorney.