The U.S. Federal Reserve (FED) and Federal Deposit Insurance coverage Corp (FDIC) have ordered Voyager Digital to desist from making false and deceptive claims about its insurance coverage standing to clients.
In a joint letter despatched to the crypto agency on July 28, the regulators stated deceptive data by Voyager Digital about its funds being lined by FDIC insurance coverage could have influenced clients into investing in them.
A Voyager Twitter publish from November 12, 2020, confirmed it made an announcement stating that USD held with Voyager is FDIC insured as much as $250,000.
Have you ever heard? USD held with Voyager is FDIC insured as much as $250K. Our clients’ safety is our prime precedence. Begin rising your crypto portfolio as we speak.
— Voyager (@investvoyager) November 12, 2020
The regulators stated:
“Based mostly on the data gathered thus far, it seems that these representations seemingly misled and had been relied upon by clients who positioned their funds with Voyager and don’t have speedy entry to their funds.”
In response to the letter, Voyager has a deposit account with Metropolitan Business Financial institution, which is insured, however had no insurance coverage license from the FDIC to supply its clients.
Voyager has been mandated to take away all deceptive statements from all related touchpoints inside two enterprise days. Nonetheless, they’ll interact the regulators for additional clarifications in the event that they possess any authorized proof of FDIC deposit insurance coverage.
Voyager looking for a means out
The stop and desist order from the regulators is the most recent in a string of unlucky occasions besieging Voyager.
The 3AC collapse triggered Voyager to halt buyer withdrawals abruptly. A couple of days later, it filed for Chapter 11 chapter. Voyager is at present looking for intervention from traders to settle its collectors.
Sam Bankman-Fried’s FTX alternate supplied to purchase all of Voyager’s property and refund clients following the difficulty. Nonetheless, Voyager rebuffed the supply and stated it was a “low-ball bid dressed up as a white knight rescue.”
Voyager backed off the FTX deal and stated it’s engaged on a restructuring course of to return most worth to its clients and stakeholders.
In a July 11 replace, Voyager began a voluntary restructuring course of that may return funds to clients in crypto and customary fairness. It disclosed that its crypto asset holding quantity to roughly $1.3 billion, plus a $650 million debt owed by collapsed Three Arrows Capital (3AC).
