The U.S. Federal Reserve (FED) and Federal Deposit Insurance coverage Corp (FDIC) have ordered Voyager Digital to desist from making false and deceptive claims about its insurance coverage standing to prospects.
In a joint letter despatched to the crypto agency on July 28, the regulators stated deceptive data by Voyager Digital about its funds being lined by FDIC insurance coverage might have influenced prospects into investing in them.
A Voyager Twitter publish from November 12, 2020, confirmed it made an announcement stating that USD held with Voyager is FDIC insured as much as $250,000.
Have you ever heard? USD held with Voyager is FDIC insured as much as $250K. Our prospects’ safety is our prime precedence. Begin rising your crypto portfolio at present.
— Voyager (@investvoyager) November 12, 2020
The regulators stated:
“Primarily based on the data gathered up to now, it seems that these representations possible misled and had been relied upon by prospects who positioned their funds with Voyager and don’t have instant entry to their funds.”
In response to the letter, Voyager has a deposit account with Metropolitan Business Financial institution, which is insured, however had no insurance coverage license from the FDIC to supply its prospects.
Voyager has been mandated to take away all deceptive statements from all related touchpoints inside two enterprise days. Nevertheless, they will interact the regulators for additional clarifications in the event that they possess any authorized proof of FDIC deposit insurance coverage.
Voyager searching for a manner out
The stop and desist order from the regulators is the most recent in a string of unlucky occasions besieging Voyager.
The 3AC collapse induced Voyager to halt buyer withdrawals abruptly. Just a few days later, it filed for Chapter 11 chapter. Voyager is at present searching for intervention from buyers to settle its collectors.
Sam Bankman-Fried’s FTX alternate supplied to purchase all of Voyager’s belongings and refund prospects following the difficulty. Nevertheless, Voyager rebuffed the supply and stated it was a “low-ball bid dressed up as a white knight rescue.”
Voyager backed off the FTX deal and stated it’s engaged on a restructuring course of to return most worth to its prospects and stakeholders.
In a July 11 replace, Voyager began a voluntary restructuring course of that can return funds to prospects in crypto and customary fairness. It disclosed that its crypto asset holding quantity to roughly $1.3 billion, plus a $650 million debt owed by collapsed Three Arrows Capital (3AC).