After settling on Thursday with the Federal Trade Commission (FTC), bankrupt crypto firm Voyager is completely banned from dealing with shoppers’ 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 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 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 for $1.65 billion, however the high quality is suspended in order that the defunct firm can use that cash to pay again prospects as a substitute. In a parallel submitting, the CFTC can be charging Ehrlich with fraud and registration failures.
Government businesses have been more and more litigious on the subject of crypto corporations, particularly in mild of excessive profile failures just like the FTX collapse — at present, 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 collection for selling unregistered securities.
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