Co-founder of Voyager Digital Faces Accusations of Breaking Rules
According to a report from Bloomberg News, investigators at the Commodity Futures Trading Commission (CFTC) have concluded that Stephen Ehrlich, the co-founder of Voyager Digital Ltd., broke rules prior to the crypto lender’s bankruptcy last year. The CFTC staff in its enforcement division conducted an investigation and recommended internally that the agency accuse Ehrlich of misleading customers about the safety of their assets, thereby violating derivatives rules.
The next step is for the five CFTC commissioners to vote on whether to approve an enforcement action against Ehrlich. This decision is expected within the next few days. Ehrlich, in response to these anticipated civil claims, expressed his anger and confusion, calling them unfounded. He stated that Voyager had closely collaborated with regulators and believed that the allegations were a result of referees making new rules after the game has ended. Ehrlich expressed confidence in being vindicated in court.
Voyager’s Bankruptcy and Industry Volatility
Voyager Digital filed for Chapter 11 bankruptcy protection over a year ago due to prolonged volatility in the cryptocurrency industry. The downturn began in May 2022 when the Terra blockchain collapsed, causing a market value loss of $40 billion.
Hot Take: CFTC Investigation Adds to Cryptocurrency Industry Scrutiny
The CFTC’s investigation into Stephen Ehrlich and Voyager Digital highlights the increasing scrutiny faced by companies operating in the cryptocurrency industry. As regulators strive to protect investors and maintain market integrity, it is crucial for businesses to adhere to rules and regulations. This case serves as a reminder that misleading customers about asset safety can have serious consequences. It remains to be seen how this enforcement action will unfold and whether it will set a precedent for future regulatory actions in the crypto space.
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