FTC Settles with Voyager Digital Over Misleading FDIC Claims, Former CEO Charged

blockchain.news:

The Federal Trade Commission (FTC) on October 12, 2023, disclosed a settlement with the beleaguered cryptocurrency firm, Voyager Digital, post allegations of misleading consumers regarding the safety of their deposits. The settlement emerges amid a broader crackdown on deceptive practices in the rapidly evolving crypto sector.

Voyager Digital, under the helm of CEO Stephen Ehrlich, is alleged to have falsely claimed that consumers' deposits were insured by the Federal Deposit Insurance Corporation (FDIC) from at least 2018 until its bankruptcy declaration in July 2022. This misrepresentation reportedly played a significant role in attracting consumers to entrust their funds to Voyager. The debacle resulted in consumers being locked out of their cash accounts for over a month, culminating in a loss exceeding $1 billion in cryptocurrency assets.

Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection, emphasized the ongoing efforts to curb deceitful claims surrounding cryptocurrency assets, which witnessed over $1.4 billion in losses due to scams in the previous year alone. The action against Voyager and Ehrlich underscores the FTC's commitment to ensuring companies and individuals adhere to truthful claims, particularly regarding FDIC insurance.

The settlement mandates a permanent prohibition on Voyager and its affiliates from handling consumers’ assets. Furthermore, a $1.65 billion judgment has been agreed upon, albeit suspended to allow the bankruptcy proceedings to facilitate the return of remaining assets to consumers. However, former executive Stephen Ehrlich has not concurred with a settlement, thus, the litigation against him will continue in federal court. Additionally, Ehrlich's wife, Francine