CFTC and FTC file lawsuits against former Voyager Digital CEO for fraud, making false claims

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The USA Commodity Futures Buying and selling Fee (CFTC) and Federal Commerce Fee (FTC) have filed parallel lawsuits in opposition to Stephen Ehrlich, the previous CEO of crypto lending agency Voyager Digital.

In an Oct. 12 announcement, the CFTC said it had filed a lawsuit in U.S. District Court docket for the Southern District of New York in opposition to Ehrlich and Voyager for alleged fraud and “registration failures” related to the platform and its “unregistered commodity pool”. The fee stated it deliberate to hunt restitution, disgorgement, civil financial penalties, and everlasting buying and selling and registration bans.

“Ehrlich and Voyager lied to Voyager prospects,” stated CFTC enforcement director Ian McGinley. “Whereas representing they might deal with prospects’ digital asset commodities safely and responsibly, behind the scenes, they took shockingly reckless dangers with their prospects’ property, resulting in Voyager’s chapter and big buyer losses. When their enterprise started to break down, they continued mendacity to their prospects, concealing Voyager’s true monetary well being.”

In a parallel motion, the FTC said it had reached a settlement with Voyager “that can completely ban it from dealing with customers’ property” and filed a lawsuit in U.S. District Court docket for the Southern District of New York in opposition to Ehrlich for claiming that Voyager accounts insured by the Federal Deposit Insurance coverage Company (FDIC) and have been “protected”. As a part of the proposed settlement, Voyager and its associates can pay a $1.65 billion charge.

The FTC’s grievance targeted on Voyager claiming USD Coin (USDC) deposits have been insured by the FDIC. Ehrlich allegedly transferred tens of millions of {dollars} in funds from Voyager to his spouse Francine, who was named as a aid defendant within the FTC case. Each lawsuits centered round allegedly fraudulent statements made by Ehrlich with reference to Voyager’s monetary well being in 2022.

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Voyager filed for Chapter 11 chapter safety in July 2022 amid the crypto market downturn, with the case nonetheless ongoing on the time of publication. In Could, the chapter courtroom approved Voyager’s plan to repay prospects.

Each the CFTC and FTC have circumstances pending in opposition to crypto corporations and their executives, together with former Celsius CEO Alex Mashinsky and former FTX CEO Sam Bankman-Fried, whose first legal trial began on Oct. 3. In July, Binance and its CEO, Changpeng Zhao, pushed for the CFTC to dismiss a lawsuit alleging the corporate supplied unregistered derivatives merchandise.

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