After settling on Thursday with the Federal Commerce Fee (FTC), bankrupt crypto firm Voyager is completely banned from dealing with customers’ property. However the authorities company additionally introduced on Thursday that it’s suing Voyager’s former CEO, Stephen Ehrlich, for falsely claiming that customers’ accounts had been FDIC insured.
When a financial institution or monetary service is FDIC insured, that implies that a prospects’ funds shall be protected even when the financial institution fails. Whereas Voyager promised prospects this very important safety, these claims weren’t true, because the FDIC doesn’t insure crypto property in any respect.
“When the corporate failed, customers misplaced entry to vital property they’d saved, together with ongoing wage deposits, faculty tuition funds, and down funds for houses,” the FTC defined in an announcement. Voyager’s prospects had been unable to entry their money accounts for over a month, and greater than $1 billion was misplaced in crypto property.
Voyager filed for chapter in July 2022, citing unstable crypto costs and the chapter of Three Arrows Capital (3AC), a crypto hedge fund that owed Voyager $650 million.
As a part of the settlement, the FTC is fining Voyager $1.65 billion, however the high-quality is suspended in order that the defunct firm can use that cash to pay again prospects as an alternative. In a parallel submitting, the CFTC can be charging Ehrlich with fraud and registration failures.
Authorities businesses have been more and more litigious in terms of crypto firms, particularly in gentle of high-profile failures just like the FTX collapse — at present, former FTX CEO Sam Bankman-Fried is on trial for fraud. Simply final month, the SEC charged Mila Kunis and Ashton Kutcher’s “Stoner Cats” NFT series for selling unregistered securities.