A commissioner for the United States Commodity Futures Trading Commission (CFTC) has criticized Voyager Digital for its mistakes that resulted in the loss of billions of dollars of customer funds.
“Because of Voyager’s failures, the company became no better than a house of cards.”
The commissioner, Kristin Johnson, accused Voyager of misleading practices, ignoring warning signs, and neglecting due diligence measures that should have protected customers.
“It is astounding that Voyager failed to exert pressure on the firms where it invested its customers’ assets.”
Johnson stated that Voyager disregarded transparency requirements and failed to hold investment firms accountable for the assets they received from customers.
The CFTC and the Federal Trade Commission filed parallel lawsuits against Voyager’s former CEO, Stephen Ehrlich, on October 12. The CFTC lawsuit alleges fraud and registration failures in Voyager’s platform.
The FTC reached a proposed settlement with Voyager, prohibiting the firm from offering certain products and services. The settlement also includes a judgment of $1.65 billion, which will be used to repay customers in the bankruptcy proceedings.
CFTC Commissioner Caroline Pham also issued a statement, expressing the regulator’s commitment to taking action against cryptocurrency firms that misuse customer funds. She emphasized the importance of distinguishing between managing investor funds for trading derivatives and providing deposits and loans to others.
Pham raised concerns that the CFTC’s interpretation of what constitutes a commodity pool operator may exceed its statutory authority and disrupt established legal and regulatory frameworks for lending.
Voyager filed for Chapter 11 bankruptcy in July 2022, indicating significant debts owed to creditors. The firm recently opened withdrawals for its customers.
Key Points:
– A CFTC commissioner criticized Voyager Digital for its mistakes that led to the loss of billions of dollars of customer funds.
– The commissioner accused Voyager of misleading practices, ignoring warning signs, and neglecting due diligence measures.
– The CFTC and the Federal Trade Commission filed lawsuits against Voyager’s former CEO.
– The FTC reached a proposed settlement with Voyager, banning the firm from offering certain products and services.
– Voyager filed for Chapter 11 bankruptcy and recently opened withdrawals for customers.
