Voyager founder charged by CFTC for fraud and by FTC for misleading investors that lost $1 billion
|- The Commodity Futures Trading Commission (CFTC) announced charges against the CEO of Voyager, Stephen Ehrlich.
- Per the CFTC, Ehrlich and Voyager falsely claimed the platform to be a “safe haven” for customers’ assets.
- The CFTC is seeking restitution and a permanent trading and registration ban against Ehlrich.
- On the same day, the Federal Trade Commission settled with Voyager but continued its suit against the former CEO.
Voyager was among the first crypto companies to collapse and file for bankruptcy in 2022. While the platform has been making efforts to return its customers' assets since then, it looks like the regulatory bodies are not willing to be patient.
CFTC charges Voyager founder with fraud
The Commodity Futures Trading Commission (CFTC) announced on Friday that the regulator would be charging Voyager founder, Stephen Ehrlich, with fraud and registration failures. According to the press release from CFTC, Ehlrich, along with Voyager, misled customers into believing the platform to be a safe haven for “earning high-yield returns to induce customers to purchase and store digital asset commodities”.
CFTC added,
“Ehrlich and Voyager lied to Voyager customers. While representing they would treat customers’ digital asset commodities safely and responsibly, behind the scenes, they took shockingly reckless risks with their customers’ assets, leading to Voyager’s bankruptcy and huge customer losses.
The regulator also stated that it aims to seek restitution along with civil monetary penalties as well as permanent trading and registration bans against Ehlrich.
FTC settles with Voyager
In addition to the CFTC, the Federal Trade Commission (FTC) also announced that it would be filing a lawsuit against the former CEO for misleading customers into believing that customers’ accounts were insured by the Federal Deposit Insurance Corporation (FDIC).
However, the FTC did settle its charges with Voyager on the grounds that it would be permanently banned from handling consumers’ assets. FTC added,
“The companies also agreed to a judgment of $1.65 billion, which will be suspended to permit Voyager to return its remaining assets to consumers in the bankruptcy proceedings.
Earlier this May, a US bankruptcy court approved Voyager Digital’s liquidation plan, which would allow the firm to return nearly $1.33 billion worth of assets to its customers. However, this $1.33 billion only accounted for 75% of the total amount lost by customers.
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