In a latest submitting, Voyager Digital, a once-thriving crypto agency, has agreed to a $1.65 billion settlement with US regulators, marking one of many largest fines ever imposed within the sector. Moreover, a authorized cloud is gathering across the agency’s former CEO, Stephen Ehrlich, as regulators file a lawsuit towards him, alleging a collection of fraudulent actions.
CFTC Alleges Ehrlich Misled Clients on Voyager’s Monetary Well being
Authorized actions have been initiated towards the previous CEO of Voyager, a cryptocurrency lending agency that went bankrupt final 12 months, by two US regulatory our bodies.
Each the Federal Commerce Fee (FTC) and the Commodity Futures Buying and selling Fee (CFTC) have lodged complaints within the US District Courtroom for the Southern District of New York, in keeping with courtroom paperwork. The FTC has recognized each Voyager and its former CEO, Stephen Ehrlich, as defendants, whereas the CFTC has singled out Ehrlich alone in its motion.
The CFTC seeks numerous types of aid towards Ehrlich, together with “restitution, disgorgement, civil financial penalties, everlasting buying and selling and registration bans, and a everlasting injunction towards additional violations” of the Commodity Change Act. The regulatory physique alleges that Ehrlich misled clients concerning the protection and monetary stability of the Voyager digital asset platform.
Concurrently, the FTC alleges that misleading claims had been made by each Voyager and Ehrlich about having Federal Deposit Insurance coverage Company (FDIC) insurance coverage, which gives protection for deposits in US banks as much as $250,000. Voyager purportedly marketed on its web site and app that funds can be FDIC-insured, with the FTC grievance together with screenshots of the webpage that marketed FDIC insurance coverage as much as the aforementioned quantity.
The FTC asserts that each Ehrlich and Voyager had been absolutely cognizant of the truth that neither the agency nor its buyer deposits had been FDIC-insured.
FTC Settles With Voyager For $1.65 Billion Wonderful
In a separate authorized improvement, the FTC has organized a settlement with Voyager’s company entity, which is required to pay a fantastic of $1.65 billion as a part of the settlement. In response to courtroom paperwork, the corporate neither confirmed nor refuted the allegations. Moreover, Francine Ehrlich, spouse of Stephen Ehrlich, is recognized as a aid defendant within the FTC grievance.
The FTC alleges, “Reduction Defendant Francine Ehrlich has acquired funds that may be straight traced to Defendants’ misleading acts or practices alleged beneath, and she or he has no legit declare to these funds.”
In 2022, Voyager was amongst a number of corporations that declared chapter following the downfall of the cryptocurrency hedge fund Three Arrows Capital. The corporate sought chapter safety on July 6 of that 12 months, subsequent to the suspension of deposits and withdrawals. Earlier this 12 months, Voyager concluded a plan to liquidate its belongings as a element of a buyer reimbursement technique.