SUPERNEWS

Crypto

Gronkowski Settles Crypto Suit for $1.9M, Leaves Cuban in Limbo

Gronkowski to pay $1.9M in crypto settlement; SEC eyes Robinhood's crypto operations amid industry crackdown.

By Alex P. Chase

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5/7, 15:17 EDT
Bitcoin / U.S. dollar
Robinhood Markets, Inc.
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Key Takeaway

  • Rob Gronkowski agrees to pay $1.9M to settle a lawsuit from Voyager Digital investors, contributing to a $2.4M settlement pool.
  • Settlement leaves Mark Cuban and the Dallas Mavericks as remaining defendants for trial in November 2024.
  • The court's approval of the settlement will dismiss claims against Gronkowski, Oladipo, and Cassill.

Gronkowski Settles Voyager Claims

Former NFL star Rob Gronkowski, along with NBA player Victor Oladipo and racecar driver Landon Cassill, has agreed to pay a total of $2.4 million to settle claims from former customers of the bankrupt cryptocurrency lender Voyager Digital. Gronkowski, who became a Voyager brand ambassador and shareholder in September 2021, will contribute $1.9 million to the settlement pool. This agreement, pending court approval, aims to provide millions in relief to the class of Voyager investors, leaving Mark Cuban and the Dallas Mavericks as the remaining defendants for a trial set in November 2024.

SEC Targets Robinhood's Crypto Business

Robinhood, the popular trading platform, faces potential legal action from the Securities and Exchange Commission (SEC) over its cryptocurrency operations. The SEC issued a Wells notice to Robinhood's crypto unit, indicating a preliminary decision to recommend enforcement action. This could result in civil litigation, monetary penalties, and business activity restrictions. Robinhood, which boasts over 23 million investors and $119 billion in assets under custody, generated $135 million from cryptocurrency transactions in the previous year. The company has previously avoided listing certain tokens and offering products like lending or staking to align with SEC policies.

Regulatory Crackdown Intensifies

The SEC's move against Robinhood is part of a broader regulatory crackdown on the cryptocurrency industry, especially following the collapse of FTX in 2022. The agency has argued that many tokens are securities and should be regulated accordingly. This stance has led to lawsuits against major crypto platforms such as Coinbase, Binance, and Kraken. Robinhood's chief legal officer, Dan Gallagher, expressed disappointment over the SEC's decision, emphasizing the company's belief that the assets listed on its platform are not securities. The SEC's aggressive approach reflects its intent to bring the burgeoning digital assets industry under regulatory oversight.