The CFTC Takes Legal Action Against Voyager Digital and Former CEO
The US Commodity Futures Trading Commission (CFTC) has filed a complaint in the US District Court for the Southern District of New York against Voyager Digital and its former CEO, Stephen Ehrlich. The CFTC alleges fraud and registration failures related to the operation of the Voyager digital asset platform and an unregistered commodity pool.
Voyager Accused of Misleading Customers
The CFTC claims that Ehrlich falsely marketed the Voyager platform as a safe haven for high-yield returns, deceiving customers into purchasing and storing digital assets. The filing states that Voyager took reckless risks with customers’ assets, resulting in the company’s bankruptcy and significant customer losses. The lawsuit seeks various penalties, including restitution, disgorgement, civil monetary penalties, trading and registration bans, and a permanent injunction against further violations.
FTC Charges Voyager with Violating Consumer Protection Laws
In addition to the CFTC’s legal action, the Federal Trade Commission (FTC) has charged Voyager and Stephen Ehrlich with violating the FTC Act and the Gramm-Leach-Bliley Act. The FTC alleges that Voyager falsely claimed customers’ accounts were insured by the FDIC and misled consumers about the safety of their deposits.
Voyager allegedly enticed customers to deposit funds by assuring them of the safety of their assets on the platform. However, the company was neither a bank nor a financial institution, and the deposits were not eligible for FDIC insurance. As a result, consumers suffered significant losses when Voyager faced financial difficulties.
Stephen Ehrlich Rejects Settlement
A proposed settlement between Voyager and its affiliates would permanently ban them from handling consumers’ assets and offering related services. The companies have also agreed to a judgment of $1.65 billion, which will be suspended to allow Voyager to return the remaining assets to consumers during bankruptcy proceedings. However, Stephen Ehrlich has not agreed to the settlement, and the FTC’s case against him will proceed in federal court.
The proposed settlement also includes provisions that prohibit Voyager and its affiliates from misrepresenting product benefits, making false representations to obtain financial information, and disclosing consumer information without consent.
Regulatory Bodies Seek Accountability
The CFTC and FTC are both seeking to hold Voyager, Stephen Ehrlich, and other parties involved accountable for their alleged deceptive practices and violations of financial regulations.
Hot Take: Voyager Faces Legal Consequences for Fraudulent Actions
The US Commodity Futures Trading Commission (CFTC) has taken legal action against Voyager Digital and its former CEO, Stephen Ehrlich, accusing them of fraud and registration failures. The CFTC claims that Voyager misled customers by falsely marketing its platform as a safe haven for high-yield returns. Additionally, the Federal Trade Commission (FTC) has charged Voyager with violating consumer protection laws by falsely claiming customer accounts were insured and misleading consumers about deposit safety. While Voyager and its affiliates have agreed to a proposed settlement that includes a ban on handling consumer assets, Stephen Ehrlich has rejected the settlement. Both regulatory bodies aim to hold all parties accountable for their alleged deceptive practices and financial violations.
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