Voyager Digital Ordered to Pay $1.65 Billion in FTC Settlement Amid Crypto Crime Crackdown
Summary:
A U.S. federal judge has mandated crypto lending firm, Voyager Digital, to pay $1.65 billion to the United States Federal Trade Commission (FTC). The ruling follows litigation citing misleading statements about customer funds' usage and security. In addition, this order is part of a wider crackdown on alleged crimes related to cryptocurrency, including a separate case where the FTC ordered Celsius to pay $4.7 billion in penalties.
A U.S. federal judge has sanctioned a resolution necessitating Voyager Digital, a cryptocurrency lending company, and its adjuncts to remit $1.65 billion in financial restitution to the U.S. Federal Trade Commission (FTC). The mandate came to fruition on November 28 and was instituted by Judge Gregory Woods in the U.S. District Court of New York's Southern District. Woods' decree demands Voyager to settle the amount, subsequent to the compromise unveiled in October between it and the FTC. Under the provisos of this accord, Voyager is imperatively forbidden from marketing or conceiving any product or service correlated with digital assets.
The judiciary's directive, as per Woods, will scarcely impact Voyager's ongoing bankruptcy proceedings. The company sought Chapter 11 safeguard in July of 2022, revealing debts in the range of $1 billion to $10 billion. In May, the court ratified a scheme authorizing Voyager's stakeholders to initialy retrieve 35.72% of their claims from the company.
Pursuant to this settlement, those in connection with Voyager are compelled to collaborate fully with FTC representatives. This includes providing testimonies during hearings, trials, and discovery processes. A year hence, Voyager will be obliged to submit a report detailing its adherence to the proceedings, which will be subject to FTC's scrutiny.
In parallel cases that happened in October, both the FTC and the U.S. Commodity Futures Trading Commission took legal action against Voyager's erstwhile CEO, Stephen Ehrlich. They accused Ehrlich of spreading deceptive information about the manner and security of clients' capital utilization. Ehrlich, who at that time claimed Voyager has always maintained open communication with regulatory bodies, predominantly repudiated these accusations.
In a separate incident in July, the FTC mandated the crypto lending enterprise, Celsius, to disburse $4.7 billion in penalties. This move followed allegations of misappropriation of users' capital and false advertising of platform services by the company founders. Alex Mashinsky, former CEO of Celsius, was consequently arrested by U.S. authorities and he will be on bail until his trial, which is slated to occur in September 2024.
U.S. regulatory organizations are escalating their crackdown on crimes associated with cryptocurrency.
Published At
11/28/2023 6:09:21 PM
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