The CFTC Files Complaint Against Former CEO of Voyager Digital
The United States Commodity Futures Trading Commission (CFTC) has filed a complaint against Stephen Ehrlich, the former CEO of Voyager Digital. The CFTC alleges that Ehrlich committed fraud and failed to register the bankrupt crypto lender with the agency. This comes as another US regulatory body, the Federal Trade Commission (FTC), announced a settlement with Voyager Digital.
CFTC’s Charges Against Stephen Ehrlich
The CFTC claims that Ehrlich and Voyager Digital defrauded customers by falsely promoting the crypto asset platform as trustworthy and a “safe haven” for users to purchase and store assets. They also promised customers high returns of up to 12%. However, Ehrlich and Voyager Digital loaned customers’ assets to third-party entities with a high risk of generating income for returns.
One of these third-party companies defaulted on its repayment, causing Voyager Digital’s liquidity crisis. Despite this, Ehrlich assured customers that their funds were safe until the company filed for bankruptcy, owing users over $1.7 billion.
FTC’s Settlement With Voyager Includes $1.65 Billion Fine
The FTC is also suing Ehrlich for misleading customers by falsely claiming that their deposited funds were insured by the Federal Deposit Insurance Corporation (FDIC). The FDIC insurance did not cover cryptocurrency assets, and in July 2022, the FDIC and Federal Reserve asked Voyager to correct its misleading statement.
The FTC reached a proposed settlement with Voyager and affiliated entities, which includes a payment of $1.65 billion. The companies are permanently prohibited from handling customer funds. However, Ehrlich has not agreed to a settlement with the FTC, and the regulator plans to proceed with the case against him in federal court.
Hot Take: Allegations of Fraud and Misrepresentation Against Voyager Digital’s Former CEO
The former CEO of Voyager Digital, Stephen Ehrlich, is facing serious allegations of fraud and misrepresentation. The CFTC claims that Ehrlich and the company misled customers by falsely promoting their platform as safe and promising high returns. Customers deposited over $2 billion on Voyager based on these misleading representations.
Furthermore, Ehrlich and Voyager loaned customers’ assets to risky third-party entities, which ultimately led to Voyager’s bankruptcy and customers losing over $1.7 billion. The FTC has also filed a lawsuit against Ehrlich for falsely claiming that customer funds were insured by the FDIC.
The regulatory bodies are seeking monetary penalties, disgorgement, restitution, and permanent bans on trading and registration. This case highlights the importance of transparency, honesty, and accountability in the cryptocurrency industry.
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