CFTC Considers Enforcement Action Against Former CEO of Bankrupt Crypto Firm Voyager Digital
Summary:
Stephen Ehrlich, former CEO of crypto lender Voyager Digital, is being considered for enforcement action by the US Commodity Futures Trading Commission (CFTC) over alleged violations of U.S. derivatives regulations. This comes prior to Voyager Digital's bankruptcy filing amidst a declining crypto market. Voyager, currently undergoing bankruptcy proceedings, has been under Federal Trade Commission scrutiny for supposedly misleading crypto marketing. Additionally, the firm's plan to pay back customers was approved in May, while the higher number of enforcement actions in 2023 have been initiated by the Securities and Exchange Commission.
U.S. Commodity Futures Trading Commission (CFTC) authorities are reportedly contemplating taking steps against Stephen Ehrlich, the previous CEO of cryptocurrency lending enterprise Voyager Digital. A report by Bloomberg dated October 6th conveyed that following an investigation, CFTC personnel concluded that Ehrlich infringed U.S. derivatives guidelines prior to the bankruptcy declaration of Voyager. Amid the crypto market's downtrend, Voyager filed for Chapter 11 protection in July 2022.
Upon learning about the allegations, Ehrlich was recorded to be puzzled and upset, asserting that this seems like a situation where the arbiters crafting new laws and declaring violations post the completion of the game.
In related news, Voyager Digital's creditors have been charged $5.1M in legal fees as the firm is already subject to the scrutiny by the U.S. Federal Trade Commission for its perceived deceitful and unfair crypto marketing practices to the public. Amid the ongoing bankruptcy proceedings, the company's customer repayment plan was ratified by bankruptcy court in May.
Several cases pending against crypto entities that can potentially disrupt the U.S. regulatory domain are with the CFTC. However, the lion's share of enforcement actions in 2023 have been initiated by the Securities and Exchange Commission. Binance and its CEO, Changpeng Zhao, have been lobbying for authorities to dismiss a lawsuit lodged by the CFTC in March. Moreover, several executives at Binance.US have departed the platform owing to increasing regulatory examination.
This development reflects a larger trend that sees U.S. enforcement agencies ramping up action against crypto-associated wrongdoing.
Published At
10/6/2023 3:50:46 PM
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