Voyager Digital was ‘no better than a house of cards’ – CFTC. Cryptocurrency scrgruppen

The commissioner of the US Commodity Futures Trading Commission (CFTC) criticized Voyager Digital for its mistakes that ultimately led to the loss of billions of dollars in customer funds.

In a statement dated October 12, Commissioner Christine Johnson said He took aim at Voyager for deceptive practices, ignoring warning signs, and “due diligence” that failed to protect customers.

“Because of Voyager’s failures, the company is no better than a house of cards.”

Commodities said Voyager turned a blind eye to what its investment firms were doing with their clients’ money:

“It is astonishing that Voyager failed to put pressure on the companies in which its clients’ assets were invested.”

“Instead of requiring investment firms that received client assets to provide higher levels of transparency, Voyager evaded long-entrenched expectations of custodians and simply sent client funds without making a significant effort to preserve them,” she added.

Johnson’s comments came after the regulator, along with the Federal Trade Commission, filed parallel lawsuits against former Voyager CEO Steven Ehrlich on October 12.

The CFTC lawsuit alleges that Ehrlich and Voyager engaged in fraud and “registration failures” on their platform and its “pool of unregistered commodities.”

On the other hand, the Federal Trade Commission (FTC) has reached a proposed settlement with Voyager, prohibiting the company from offering, marketing, or promoting any product or service that can be used to deposit, exchange, invest, or withdraw any assets, According to To the October 12 statement.

Voyager and its subsidiaries agreed to a $1.65 billion judgment, which will be allocated to pay customers in bankruptcy proceedings.

Meanwhile, October 12 is separate statement CFTC Commissioner Carolyn Pham said the regulator will continue to take action against cryptocurrency companies that misuse customer funds:

“There is a big difference between managing investors’ money for the purpose of trading derivatives, and taking deposits and making loans to others. Without consumer finance and credit, our economy would grind to a halt.

Related: CFTC Issues $54 Million Default Judgment Against Trader in Cryptocurrency Ponzi Scheme

However, Pham believes that the CFTC may have overstepped the bounds of its authority in interpreting what constitutes a commodity pool operator:

“Such an interpretation would be an overreach beyond our legal authority and would disrupt well-established legal and regulatory frameworks for institutional lending and consumer finance.”

On September 7, Pham called on the CFTC to create a regulatory pilot program for cryptocurrencies that would address the risks faced by retail investors.

Voyager filed for Chapter 11 bankruptcy in July 2022 in which it indicated it may owe assets ranging from $1 billion to $10 billion to more than 100,000 creditors.

The cryptocurrency brokerage opened withdrawals to customers in June.

magazine: Cryptocurrency Regulation: Does SEC Chairman Gary Gensler Have the Final Say?

Cryptocurrency scrgruppen

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