After deciding on Thursday with the Federal Trade Commission (FTC), bankrupt crypto company Voyager is completely banned from dealing with customers’ property. But the federal government 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 will likely be protected even when the financial institution fails. While 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 company failed, consumers lost access to significant assets they had saved, including ongoing salary deposits, college tuition funds, and down payments for homes,” the FTC defined in a press release. 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 risky 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 positive is suspended in order that the defunct company 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.
Government businesses have been more and more litigious in relation to crypto corporations, particularly in mild of high-profile failures just like the FTX collapse — presently, former FTX CEO Sam Bankman-Fried is on trial for fraud. Just final month, the SEC charged Mila Kunis and Ashton Kutcher’s “Stoner Cats” NFT sequence for selling unregistered securities.