CFTC Sues Former CEO of Crypto Lender Voyager for Fraud

The U.S. Commodity Futures Trading Commission (CFTC) charged the erstwhile CEO of bankrupt cryptocurrency lender Voyager Digital with fraud. The regulator accused Stephen Ehrlich and the institution of luring investors with promises of high-yield returns portion breaking derivatives rules. Ehrlich was besides sued by the Federal Trade Commission (FTC).

U.S. Commodities Regulator Takes Legal Action Against Former Chief Executive of Voyager

The CFTC filed a suit against co-founder and ex-CEO of Voyager Digital, Stephen Ehrlich. The ailment submitted to the U.S. District Court for the Southern District of New York charges him with fraud and registration failures successful transportation with Voyager and the cognition of an unregistered commodity pool, the Commission announced.

The U.S. regulator besides alleged that Ehrlich and the institution falsely touted Voyager arsenic a “safe haven” offering an accidental to gain high-yield returns, of up 12%, successful bid to lure customers to acquisition and store integer assets connected the platform. Commenting connected the Commission’s legal action, CFTC Director of Enforcement Ian McGinley stated:

Ehrlich and Voyager lied to Voyager customers. While representing they would dainty customers’ integer plus commodities safely and responsibly, down the scenes, they took shockingly reckless risks with their customers’ assets, starring to Voyager’s bankruptcy and immense lawsuit losses.

Ehrlich and Voyager pooled and transferred billions of dollars’ worthy of customers’ integer assets arsenic “loans” to high-risk 3rd parties, the CFTC explained and gave an illustration from aboriginal 2022 erstwhile they transferred implicit $650 cardinal successful lawsuit funds to a integer assets hedge money identified arsenic “Firm A” without due owed diligence.

Voyager filed for bankruptcy successful aboriginal July 2022, amid volatile crypto markets and aft the illness of the Three Arrows Capital (3AC) hedge fund. The second had defaulted connected a $650 cardinal indebtedness from the crypto lender. Voyager’s clang resulted successful U.S. lawsuit losses of $1.7 billion.

“When their concern began to collapse, they continued lying to their customers, concealing Voyager’s existent fiscal health. Amplifying their fraud, Ehrlich and Voyager broke their spot with customers portion acting successful capacities that required CFTC registration, which they failed to obtain,” McGinley added.

The Federal Trade Commission, the U.S. antitrust and user extortion agency, besides sued Ehrlich connected Thursday for falsely claiming that customers could trust connected Federal Deposit Insurance extortion for their assets. He and Voyager were charged with violating the FTC Act and the Gramm-Leach-Bliley Act.

In a connection quoted by Bloomberg, Ehrlich said helium was “outraged and profoundly dismayed” by the allegations from the 2 regulatory bodies and that helium was being utilized arsenic a “scapegoat,” blaming others successful the manufacture for the losses suffered by Voyager’s customers and creditors.

What are your thoughts connected the ineligible actions taken by the CFTC and the FTC against Voyager and its erstwhile CEO Stephen Ehrlich? Tell america successful the comments conception below.