The Federal Trade Commission (FTC) and Commodity Futures Trading Commission (CFTC) have filed charges against former Voyager CEO Stephen Ehrlich.
In a statement, the FTC said it filed charges against Ehrlich for falsely claiming that Voyager accounts were insured by the Federal Deposit Insurance Corporation (FDIC) and that customer assets were safe, even though the company was already threatening facing imminent bankruptcy.
The agency says deposits made to Voyager are not covered by the FDIC because the crypto platform is neither a bank nor a financial institution.
“The FTC staff complaint alleges that Voyager and Stephen Ehrlich violated the FTC Act’s prohibition on deceptive practices and the Gramm-Leach-Bliley Act’s prohibition on obtaining a customer’s financial information through false, fictitious or violated fraudulent statements. The complaint also alleges that Stephen Ehrlich transferred millions of dollars to his wife Francine, including funds directly traceable to the alleged unlawful conduct.
The CFTC also accuses Ehrlich of fraud and failed registration in a parallel lawsuit. The regulator says Ehrlich and Voyager misrepresented Voyager’s safety and financial health and that the platform would operate with the same level of accuracy and trust as traditional financial institutions.
The commodities watchdog says Ehrlich has also failed to register as an associate of a commodity pool operator (CPO), despite raising funds for the Voyager pool.
Says CFTC’s Enforcement Director, Ian McGinley,
“Ehrlich and Voyager lied to Voyager customers. While they claimed they would handle customers’ digital assets safely and responsibly, behind the scenes they took shockingly reckless risks with their customers’ assets, leading to Voyager’s bankruptcy and massive customer losses.
By amplifying their fraud, Ehrlich and Voyager violated customer trust while trading in capacities that required CFTC registration but were unable to obtain.”
Voyager left consumers with losses of more than $1.7 billion when it collapsed last July.
Don’t miss a beat – Subscribe to receive email alerts straight to your inbox
Check price action
follow us on TweetFacebook and Telegram
Surf to the Daily Hodl mix
Generated image: Midjourney
