The US Commodity Futures Buying and selling Fee (CFTC) has taken authorized motion towards Voyager Digital and its former CEO, Stephen Ehrlich.
The CFTC filed a criticism within the US District Court docket for the Southern District of New York, alleging fraud and registration failures associated to the operation of the Voyager digital asset platform and an unregistered commodity pool.
Voyager Faces Authorized Motion For ‘Deceptive Clients’
In line with the CFTC, Ehrlich falsely marketed the Voyager platform as a secure haven for high-yield returns, deceiving clients to buy and retailer digital property.
Per the submitting, Voyager allegedly took “reckless dangers” with clients’ property, resulting in Voyager’s chapter and vital buyer losses. The lawsuit seeks varied penalties, together with restitution, disgorgement, civil financial penalties, everlasting buying and selling and registration bans, and a everlasting injunction towards additional violations of the Commodity Change Act.
In a separate however associated motion, the Federal Commerce Fee (FTC) has charged Voyager and Stephen Ehrlich with violating the FTC Act and the Gramm-Leach-Bliley Act.
The FTC alleges that the corporate falsely claimed clients’ accounts have been insured by the Federal Deposit Insurance coverage Company (FDIC) and misled shoppers concerning the security of their deposits.
The FTC’s criticism states that Voyager enticed clients to deposit funds by assuring them of the protection of their property on the platform. Nonetheless, Voyager was neither a financial institution nor a monetary establishment, and the deposits weren’t eligible for FDIC insurance coverage.
The FTC alleges that buyers suffered vital losses when Voyager skilled monetary difficulties, together with being locked out of their accounts and shedding over $1 billion in cryptocurrency property.
Stephen Ehrlich Rejects Settlement
Voyager and its associates will likely be completely banned from dealing with shoppers’ property and providing associated providers as a part of a proposed settlement.
The businesses have additionally agreed to a judgment of $1.65 billion, which will likely be suspended to permit Voyager to return the remaining property to shoppers through the chapter proceedings.
Stephen Ehrlich, nonetheless, has not agreed to a settlement, and the FTC’s case towards him will proceed in federal court docket.
The FTC’s criticism additional alleges that Ehrlich transferred thousands and thousands of {dollars} to his spouse, Francine Ehrlich, together with funds linked to the alleged illegal conduct.
The proposed settlement additionally prohibits Voyager and its associates from misrepresenting product advantages, making false representations to acquire monetary info, and disclosing client info with out consent.
Each regulatory our bodies are in search of to carry Voyager, Stephen Ehrlich, and different concerned events accountable for his or her alleged misleading practices and violations of economic laws.
Featured picture from Shutterstock, chart from TradingView.com
