The CFTC Charges Voyager Digital Co-Founder with Fraud and Failure to Register
The Commodity Futures Trading Commission (CFTC) has accused Stephen Ehrlich, the co-founder of Voyager Digital, of fraud and failing to register with the agency. The CFTC alleges that Ehrlich and his firm lied to customers and continued to lie even as Voyager faced financial difficulties. This resulted in the collapse of Voyager and significant losses for customers. The agency claims that from February to July 2022, Ehrlich misrepresented the safety and financial health of the Voyager digital asset platform. He promised high-yield returns and transferred customer funds as loans to high-risk third parties.
FTC Takes Parallel Action Against Voyager Digital
The Federal Trade Commission (FTC) has also taken action against Voyager Digital, announcing a settlement that permanently bans the company from handling consumer assets. The FTC has charged Ehrlich for falsely claiming that customer accounts were insured by the Federal Deposit Insurance Corporation (FDIC) when they were not. While Voyager has agreed to the settlement, Ehrlich has not, and the case against him will proceed in federal court.
Warning Signs of Misconduct
Last week, Bloomberg News reported that investigators at the CFTC had concluded that Ehrlich had violated rules prior to Voyager’s bankruptcy. The CFTC staff recommended accusing him of misleading customers about the safety of their assets. In response, Ehrlich stated that he and his team worked with integrity and within regulatory guidelines. However, he expressed regret for the losses suffered by Voyager’s customers and creditors.
Hot Take: Voyager Digital Faces Legal Consequences for Alleged Fraudulent Activities
The charges brought by both the CFTC and FTC against Stephen Ehrlich and Voyager Digital highlight the alleged fraudulent activities and failure to comply with regulations in the crypto industry. The accusations include lying to customers, misrepresenting the financial health of the platform, and transferring customer funds to high-risk third parties. This case serves as a reminder of the importance of transparency and accountability in the cryptocurrency space, as well as the potential risks involved in investing in unregulated platforms. It also emphasizes the need for regulatory bodies to actively monitor and enforce compliance to protect investors.
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