The US Commodity Futures Buying and selling Commission (CFTC) has taken authorized motion towards Voyager Digital and its former CEO, Stephen Ehrlich. 

The CFTC filed a criticism within the US District Courtroom 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 Prospects’

In accordance with the CFTC, Ehrlich falsely marketed the Voyager platform as a protected haven for high-yield returns, deceiving prospects to buy and retailer digital belongings. 

Per the submitting, Voyager allegedly took “reckless dangers” with prospects’ belongings, resulting in Voyager’s chapter and vital buyer losses. The lawsuit seeks varied penalties, together with restitution, disgorgement, civil financial penalties, everlasting trading and registration bans, and a everlasting injunction towards additional violations of the Commodity Change Act.

In a separate however associated motion, the Federal Commerce Commission (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 prospects’ accounts had 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 prospects to deposit funds by assuring them of the protection of their belongings on the platform. Nonetheless, Voyager was neither a financial institution nor a financial establishment, and the deposits weren’t eligible for FDIC insurance coverage. 

The FTC alleges that buyers suffered vital losses when Voyager skilled financial difficulties, together with being locked out of their accounts and shedding over $1 billion in cryptocurrency belongings.

Stephen Ehrlich Rejects Settlement 

Voyager and its associates can be completely banned from dealing with shoppers’ belongings and providing associated companies as a part of a proposed settlement. 

The businesses have additionally agreed to a judgment of $1.65 billion, which can be suspended to permit Voyager to return the remaining belongings 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 hundreds of 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 financial data, and disclosing consumer data with out consent.

Each regulatory our bodies are looking for to carry Voyager, Stephen Ehrlich, and different concerned events accountable for his or her alleged misleading practices and violations of financial laws. 

The entire crypto market cap downtrend on the every day chart. Supply: TOTAL on TradingView.com

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