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 mentioned deceptive info by Voyager Digital about its funds being lined by FDIC insurance coverage could have influenced clients into investing in them.
A Voyager Twitter put up 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 high precedence. Begin rising your crypto portfolio at the moment.
— Voyager (@investvoyager) November 12, 2020
The regulators mentioned:
“Based mostly on the data gathered thus far, it seems that these representations doubtless misled and have been relied upon by clients who positioned their funds with Voyager and would not have rapid entry to their funds.”
In response to the letter, Voyager has a deposit account with Metropolitan Industrial 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 searching for a method out
The stop and desist order from the regulators is the newest in a string of unlucky occasions besieging Voyager.
The 3AC collapse brought about Voyager to halt buyer withdrawals abruptly. Just a few days later, it filed for Chapter 11 chapter. Voyager is presently searching for intervention from traders to settle its collectors.
Sam Bankman-Fried’s FTX change provided to purchase all of Voyager’s property and refund clients following the difficulty. Nonetheless, Voyager rebuffed the provide and mentioned it was a “low-ball bid dressed up as a white knight rescue.”
Voyager backed off the FTX deal and mentioned 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 can 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).
