Caledonia Gladiators said the contracts of Dunbar and Frame, who also signed last month, had been terminated “with immediate effect based on a “serious breach of club discipline”.
BBC Scotland News understands this is not connected to any sort of violence.
The club, based in East Kilbride, just south of Glasgow, plays in Super League Basketball – the top tier of basketball in the UK.
It said in a statement: “Following this breach, we have since been made aware of serious allegations circulating on a separate matter in relation to Malik Dunbar in the US and prior to his arrival with the club.
“We work with reputable sports agencies who supply players to clubs across the world and no allegations were disclosed as part of our due diligence process.”
It said an internal review had been launched into the signing process.
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