Crypto Firm Voyager Faces Legal Storm Amid Asset Safety Concerns
U.S. regulators have taken legal action against the former CEO and co-founder of Voyager Digital, alleging that they deceived customers about the security of their assets while taking substantial risks, leading to the company's collapse.
The U.S. Commodity Futures Trading Commission (CFTC) has accused Stephen Ehrlich, a key figure in Voyager’s launch in 2018, of fraudulent activities from February to July 2022. Ehrlich and Voyager reassured customers that their digital assets were safe on their platform, valued at over $2 billion at times, while allegedly making high-risk loans to counterparties, including four now-bankrupt firms.
In 2022, Voyager joined a list of crypto firms that faced challenges due to plummeting crypto prices, interest rate fluctuations, and worsening economic conditions alongside Celsius Network and BlockFi.
CFTC’s enforcement director, Ian McGinley, stated that despite Voyager’s public claims of safeguarding customer assets, they took risky actions, leading to the company’s insolvency and substantial customer losses. The CFTC indicated Voyager owed U.S. customers over $1.7 billion.
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The Federal Trade Commission (FTC) permanently banned Voyager from handling consumer assets. They also filed a lawsuit against Ehrlich for falsely claiming customer accounts were insured by the Federal Deposit Insurance Corporation (FDIC) as the company faced bankruptcy. The FTC’s complaint also names Ehrlich’s wife, Francine Ehrlich.
Based in New Jersey, Voyager filed for bankruptcy in July, suspending customer withdrawals and issuing a notice of default to cryptocurrency hedge fund Three Arrows Capital due to missed payments on a crypto loan.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
