The U.S. Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC) have filed parallel lawsuits against Stephen Ehrlich, the former CEO of cryptocurrency finance company Voyager Digital.
In an October 12th announcement, the CFTC said: Said The company had filed suit in the U.S. District Court for the Southern District of New York against Ehrlich and Voyager for alleged fraud and “non-registration” related to the platform and its “unregistered product pool.” The commission said it plans to seek restitution, disgorgement, civil monetary penalties and a permanent trade and registration ban.
“Ehrlich and Voyager lied to Voyager customers,” said CFTC Executive Director Ian McGinley. “While they claim to treat their customers’ digital asset products safely and responsibly, behind the scenes they take shockingly reckless risks to their customers’ assets, which led to Voyager’s bankruptcy and huge customer losses. As the business began to crumble, they continued to lie to customers and hide Voyager’s true financial health.”
In parallel, the FTC Said The company reached a settlement with Voyager that “permanently prohibits it from handling consumer assets,” and filed a lawsuit against Ehrlich in the Southern District of New York alleging that Voyager’s accounts were insured by the Federal Deposit Insurance Corporation (FDIC). filed a lawsuit in district court. ) and was “safe”. As part of the proposed settlement, Voyager and its affiliates will pay $1.65 billion in fees.
The FTC’s complaint focused on Voyager’s claims that its USD Coin (USDC) deposits were insured by the FDIC. Ehrlich allegedly transferred millions of dollars from Voyager to his wife, Francine, who was named as a relief defendant in the FTC lawsuit. Both lawsuits focused on alleged misrepresentations made by Ehrlich about Voyager’s financial health in 2022.
Related: CFTC proposes reducing anonymity to manage risk
Voyager filed for Chapter 11 bankruptcy protection in July 2022 amid the crypto market downturn, but the case is still ongoing at the time of publication. In May, a bankruptcy court approved a repayment plan for Voyager customers.
The CFTC and FTC have both filed lawsuits against crypto companies and their executives, including former Celsius CEO Alex Mashinsky and former FTX CEO Sam Bankman Fried. The case is pending, and the first criminal trial began on October 3. In July, Binance and its CEO Changpeng Chao asked the CFTC to dismiss a lawsuit alleging that the company offered unregistered derivatives products.
magazine: US enforcement agencies are stepping up crackdowns on virtual currency-related crimes