The US Federal Reserve and the Federal Deposit Insurance coverage Company (FDIC) are accusing crypto brokerage agency Voyager Digital of falsely representing its deposit insurance coverage standing.
In a joint letter, the 2 regulators declare Voyager violated part 18(a)(4) of the Federal Deposit Insurance coverage Act.
“Part 18(a)(4) of the Federal Deposit Insurance coverage Act (‘FDI Act’), 12 U.S.C. § 1828(a)(4), prohibits any particular person from representing or implying that an uninsured deposit is insured or from knowingly misrepresenting the extent and method through which a deposit legal responsibility, obligation, certificates, or share is insured beneath the FDI Act.”
The companies say Voyager, its officers and staff made varied deceptive statements claiming or suggesting that the corporate is FDIC-insured, that Voyager platform customers would obtain FDIC insurance coverage protection for funds that have been offered to or within the custody of the crypto agency, and that prospects have FDIC insurance coverage in opposition to the failure of Voyager itself.
The Fed and the FDIC deny these claims. They make clear that Voyager maintains deposit accounts on the Metropolitan Industrial Financial institution in New York for the good thing about its purchasers and it’s this depository establishment that has deposits insured by the FDIC.
The regulators ordered Voyager to stop and desist from making false representations and to take corrective actions.
“These representations are false and deceptive and, based mostly on the knowledge we’ve got to this point, it seems that the representations doubtless misled and have been relied upon by prospects who positioned their funds with Voyager and do not need instant entry to their funds.”
The accusations come as Voyager faces insolvency. The crypto agency filed for chapter in early July after one in all its greatest debtors, crypto hedge fund Three Arrows Capital (3AC), defaulted on a $650 million mortgage.
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