By: Isha Das
United States Commodity Futures Trading Commission (CFTC) has targeted Voyager Digital for its alleged erroneous practices leading to a significant loss of customer funds. The CFTC and Federal Trade Commission (FTC) filed separate lawsuits against Voyager and its former CEO, Stephen Ehrlich. The CFTC Commissioner, Kristin Johnson expressed her concerns regarding Voyager’s misleading practices and lack of due diligence in an Oct. 12 statement.
Simultaneously, the FTC has reached a proposed settlement with Voyager, banning the firm from any product or service offerings related to the deposit, exchange, investment, or withdrawal of any assets. Voyager and its affiliates agreed to a judgment of $1.65 billion for repayment to customers in their ongoing bankruptcy proceedings. On the other hand, the lawsuit against former CEO, Stephen Ehrlich, is still ongoing as he rejected the proposed settlement.
The CFTC's lawsuit accused Ehrlich and Voyager of conducting fraud and “registration failures” over its platform and its “unregistered commodity pool”. The FTC further alleges that Voyager falsely proclaimed the FDIC insurance of customer accounts, misleading consumers about the safety of their deposits. The company reportedly enticed customers to deposit funds by assuring them of their asset safety on their platform, leading to substantial losses once Voyager encountered financial difficulties.
These developments follow Voyager’s Chapter 11 bankruptcy filing in July 2022 where it may reportedly owe anywhere between $1 billion and $10 billion to more than 100,000 creditors.
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