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Mark Cuban Caught in Bankruptcy of Crypto Lender Voyager
Published
1 month agoon
By
letizo News
Mark Cuban is in trouble.
The billionaire entrepreneur has been facing a torrent of criticism for several days linked to a partnership forged with a crypto firm. Indeed, Cuban, an evangelist of the crypto industry in which he has invested, had signed an agreement linking his NBA team, the Dallas Mavericks, to the crypto lender Voyager Digital last October.
The contract, signed on October 28, is for five years and has a mission to promote cryptocurrencies by making coins more accessible through educational and digital programs.
$100 Reward When Opening an Account
As part of the partnership, Voyager promised Dallas Mavericks’ fans a $100 reward to trade crypto on Voyager for a limited time if they deposited $100 and traded just $10. The offer had met with great success, so much so that Voyager had been obliged to set up a waiting list.
“We’re going to come up with new ways to introduce Mavs fans to cryptocurrency and help them understand it,” Cuban said at the time during a press conference with Voyager CEO Steve Ehrlich. “You know, there’s a lot of hype, there’s a lot of discussion, but most people don’t understand the fundamentals behind it. We’re going to try to bring that level of education to our fans and to our joint customers.”
The problem is that less than nine months later, Voyager Digital filed for bankruptcy. And for the moment it is difficult to know if his customers will recover their money. Indeed, the firm is one of the collateral victims of the crisis of confidence having wiped out more than $2 trillion from the crypto market since all-time highs were set in November.
Voyager is a cryptocurrency trading platform. The firm also offers loans and staking services, which are a kind of rewards for holding certain coins. It was its lending business that got it into trouble: Voyager appears to have loaned its clients’ funds to crypto hedge fund Three Arrows Capital, also known as 3AC. However, this fund defaulted last month on a loan of $667 million granted to it by Voyager. Three Arrows Capital has been forced by a court in the British Virgin Islands to enter into liquidation. Faced with this disaster, Voyager suspended deposits, withdrawals and loyalty rewards on its platform.
“Customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized Company, and Voyager tokens,” Ehrlich wrote on Twitter on July 6.
Voyager ‘Is a Good Way to Learn’
On October 28, Voyager Digital shares closed at $14.21. In its last session this week before delisting at the company’s request, Voyager stock was trading at 25 cents per share.
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“You’re spending your money, so always be careful,” Cuban said at the press conference last October when asked what you need to know before the first investment in the crypto sector. “But the other thing, look, there’s investments, things like Shiba Inu and Dogecoin, those aren’t investments. But Voyager … this is a good way to learn and it’s something you can do on your smart phone. You can start getting into this and saving your money and that’s just a unique opportunity.”
Shiba Inu and Dogecoin are two meme coins that were created as a joke.
Cuban’s words and this partnership now come back to haunt him because many retail investors claim to have invested in Voyager or to have gone through the platform for their first investments in the crypto sector after the partnership with the Dallas Mavericks. These investors are expressing their anger on social social media.
“So we got rugged by @mcuban twice?” posted one Twitter user.
“@mcuban @costplusdrugs Don’t trust Cuban. I lost everything in his “partnership” with Voyager,” another user complained. “He says he isn’t in it for the money and only charges 10-15% after costs. That’s 9 figures for every Billion. That’s not someone who “isn’t in it for the money!”I’m ruined thanks to him.”
“@mcuban I made sure to mention that you suggested I use @investvoyager for my crypto exchange. 👍” complained another user.
“@mcuban is full of rugs 👀,” another said.
Cuban, who has a social media presence and has retweeted messages from users praising his efforts to drive down drug costs, has yet to discuss Voyager’s bankruptcy.
A Twitter request for comment from the Dallas Mavericks has so far gone unanswered.
“In stocks and crypto, you will see companies that were sustained by cheap, easy money—but didn’t have valid business prospects—will disappear,” Cuban said in an interview last month with Fortune. “Like [Warren] Buffett says, ‘When the tide goes out, you get to see who is swimming naked.”
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Uncategorized
American Weed Stocks Are Cheap. They’re About to Get a Sales Bump.
Published
4 weeks agoon
July 11, 2022By
letizo News
However bad the year has been for most stocks, it has been especially harsh for state-licensed cannabis sellers.
In just the past month, the
AdvisorShares Pure US Cannabis
exchange-traded fund (ticker: MSOS), which tracks America’s multistate operators—or MSOs—fell 25%, while the
S&P 500
dropped 7%.

A mega backdoor Roth is a unique 401(k) rollover strategy that’s designed for people whose incomes would ordinarily keep them from saving in a Roth Individual Retirement Account. The advantage of using a Roth IRA to save for retirement is being able to make tax-free qualified withdrawals. But not everyone can contribute to these accounts; higher-income earners are excluded. That’s where the mega backdoor Roth comes into play. If you have a 401(k) you’d like to roll over, you could use this strategy to enjoy the tax benefits of a Roth IRA without having income be an obstacle.
Make sure you’re taking advantage of every opportunity to maximize your retirement assets by working with a financial advisor.
Roth Account Basics
Before diving into the specifics of a mega backdoor Roth, there are a few things to know about Roth accounts, including Roth IRAs and Roth 401(k)s.
First, these accounts are both funded with after-tax dollars. That means when you make qualified withdrawals later, you won’t pay income tax on the money since you already paid it upfront. This is the key characteristic of Roth accounts and what makes them so appealing to investors who anticipate being in a higher tax bracket at retirement.
Next, your ability to contribute to a Roth 401(k) is not restricted by your income. But it is for a Roth IRA. For the 2021 tax year, you must be within these modified adjusted gross income limits to make a full Roth IRA contribution:
Single filers: MAGI of $125,000 or less
Married filing jointly: MAGI of $198,000 or less
Head of household: MAGI of $125,000 or less
You can make partial contributions above those income limits. But your ability to contribute phases out completely once your MAGI hits $140,000 (if you file single or head of household) or $208,000 if you’re married and file a joint return. For 2021, the full contribution allowed is $6,000 with a $1,000 catch-up contribution for savers aged 50 and older.
Finally, Roth 401(k) accounts are subject to required minimum distribution rules just like traditional 401(k) accounts. This rule requires you to begin taking money from your 401(k) starting at age 72. A Roth IRA, on the other hand, is not subject to RMD rules.
What Is a Backdoor Roth?
A backdoor Roth offers a work-around for people whose incomes are above the limits set by the IRS. When you execute a backdoor Roth, you roll money over from a traditional IRA to a Roth account. This way, you won’t have to pay taxes on your retirement savings in the Roth IRA when it’s time to make withdrawals. And you’re not subject to required minimum distribution rules either.
But there is a catch. You have to pay income tax on the money you roll over to a Roth account. So while you could save money on taxes in retirement, you’re not escaping the tax liability of a traditional IRA altogether.
How a Mega Backdoor Roth Works
A mega backdoor Roth is a backdoor Roth that’s designed specifically for people who have a 401(k) plan at work. This type of backdoor Roth allows you to contribute up to $38,500 to a Roth IRA or a Roth 401(k) in 2021. This is in addition to the regular annual contribution limits the IRS allows for these types of accounts. To execute a mega backdoor Roth, two conditions have to be met. Your 401(k) plan needs to allow the following:
You can ask your plan administrator whether your 401(k) meets these criteria. And if your plan doesn’t allow for in-service withdrawals or distributions, you could still attempt a mega backdoor Roth if you plan to leave your job in the near future.
If your plan meets the criteria, then you can take the next steps to execute a mega backdoor Roth. This is typically a two-step process that involves maxing out after-tax 401(k) contributions, then withdrawing the after-tax portion of your account to a Roth IRA.
Again, whether you can follow through on the second step depends on whether your plan allows in-service withdrawals. If it doesn’t, you’ll have to wait until you separate from your employer to roll over any after-tax money in your 401(k) into a Roth IRA.
You also need to watch out for the pro rata rule. This IRS rule says you can’t only withdraw pre- or post-tax contributions from a traditional 401(k). So if you’re completing a mega backdoor Roth, you couldn’t just withdraw post-tax contributions if your account holds both pre- and post-tax funds. In that case, you may have to roll over the entire balance to a Roth IRA.
Benefits of a Mega Backdoor Roth
There are three key benefits associated with executing a mega backdoor Roth. First, you can contribute significantly more to a Roth IRA upfront this way. For 2021, the contribution limit is $38,500 on top of the regular annual contribution limit and any catch-up contribution limits that may apply.
You’ll need to know the maximum amount you’re allowed to contribute to the after-tax portion of your 401(k). So for 2021, the IRS allows a maximum contribution of $58,000 or $64,500 if you’re 50 or older. You’d subtract your 401(k) contributions and anything your employer adds in matching contributions to figure out how much you could add to the after-tax portion.
Next, you can enjoy tax-free withdrawals in retirement. This is a benefit you may otherwise not being able to get if your income is too high to contribute to a Roth IRA. By reducing your tax liability in retirement, you can help your investment dollars go further. And you may have a larger legacy of wealth to pass on to future generations.
Finally, a mega backdoor Roth IRA would allow you to sidestep required minimum distribution rules. This means that you could retain control over when you choose to take distributions from a Roth IRA.
So who is a mega backdoor Roth right for? You may consider this move if you:
Have an eligible 401(k) plan at work
Have maxed out traditional 401(k) contributions
Are not eligible to contribute to a Roth IRA because of your income
Have additional money that you want to invest for retirement
Want to leverage the higher Roth IRA contribution limits allowed by a mega backdoor rollover
Talking to your financial advisor can help you decide if a mega backdoor Roth makes sense. And your 401(k) plan administrator should be able to tell you if it’s possible, based on your plan’s guidelines.
Mega Backdoor Roth Alternatives
If you can’t execute a mega backdoor Roth because your plan doesn’t allow it, there are other ways to increase your retirement savings. For example, you could try a regular backdoor Roth instead. This might be something to consider if you still want to enjoy the tax benefits of a Roth IRA but your plan doesn’t fit the criteria for a mega rollover. You could also elect to make Roth 401(k) contributions to your retirement plan at work. This way, you still get the benefit of contributing after-tax dollars and making tax-free withdrawals. You’d be subject to the regular contribution limits and you’d still have to take the required minimum distribution. But that may outweigh the value of tax savings in retirement.
Investing in a Health Savings Account (HSA) is another option. While these accounts are not specifically designed for retirement, they can yield multiple tax benefits. Contributions are tax-deductible and grow tax-deferred. Withdrawals are tax-free when used for eligible healthcare expenses. And at 65, you can take money out of an HSA for any reason without a tax penalty. You’ll just owe ordinary income tax on any withdrawals that are not used for healthcare expenses.
Finally, you could open a taxable brokerage account to invest. This doesn’t necessarily save you money on taxes since you’ll owe capital gains tax when you sell investments at a profit. But it could help you to diversify your investments and there are no limits on how much you can invest in a brokerage account annually.
Bottom Line
A mega backdoor Roth strategy could work well for higher-income earners who want to take advantage of Roth account benefits. There are certain rules that need to be followed to make it work, however, so you may want to talk to your plan administrator or a tax professional before going ahead. Keep in mind also that even if you can’t complete a mega backdoor Roth rollover, you still have other options for growing retirement savings.
Tips for Retirement Planning
If you’re saving for retirement in a 401(k) or IRA, pay attention to the fees you’re paying. For instance, check the expense ratios for each fund you’re invested in to understand how much you pay to own that fund on an annual basis. You can then compare that to the fund’s performance to determine whether the fees are justified. Also, consider any administrative fees you might be paying and how those affect your net returns.
Consider talking to your financial advisor about a mega backdoor Roth and whether it could be right for you. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s financial advisor matching tool makes it easy to connect with professional advisors in your local area. You can get your personalized recommendations in minutes just by answering a few simple questions. If you’re ready, get started now.
Photo credit: ©iStock.com/designer491
Uncategorized
Alibaba Is Tumbling. Chinese Tech Stocks Have a New Headache.
Published
4 weeks agoon
July 11, 2022By
letizo News
Chinese tech stocks were tumbling on Monday as two of the embattled sector’s leading players faced fresh fines from market regulators over disclosure rules.
China’s State Administration for Market Regulation announced Sunday a wave of penalties for improperly reporting past deals, in breach of competition law.
Alibaba
(ticker: BABA) and
Tencent
(0700.H.K.) were among the companies fined as a result.
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