FDIC Fires Bankruptcy Lender Voyager Over Deposit Insurance Claims

  • The US financial regulator has issued a cease and desist letter to Voyager Digital
  • Voyager, a cryptocurrency lender, filed for Chapter 11 bankruptcy earlier this month

It has been 20 days since the launch of the crypto lender Voyager Digital is advertising its savings accounts to users. Now, US regulators have hit the troubled company with a freeze and freeze.

In a words On Thursday, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board said they jointly wrote a letter to Voyager asking it to stop making false and misleading statements about its FDIC insurance.

Voyager and other employees are accused by the agency of making false statements online, including its website, mobile app and social media accounts.

These representations, the observer said, include claims that Voyager is FDIC-insured and that all user funds deposited and held by the lender, including crypto, are insured. Under the Federal Deposit Insurance Act, companies and individuals are prohibited from advertising uninsured deposit accounts as insured.

“This is false and misleading, the agency said in a statement. “Based on the information gathered so far, it appears that these representations were misled and relied on by customers who invested in Voyager and have no access to their money.”

Voyager, which has been fighting what it says is a “low-ball” buyout from Sam Bankman-Fried’s FTX and Alameda Ventures firms, became a key player in an investigation on July 8 by the FDIC by publicly declaring that its dollar investments were insured. the event the borrower would default.

Voyager maintains a deposit account for the benefit of its customers through its banking partner, Metropolitan Commercial Bank.

The lender is not insured by the FDIC, the agencies said, so customers who invested through the Voyager cryptocurrency platform will not receive insurance in the event of a default.

Earlier this month, the lender filed for Chapter 11 bankruptcy after it was revealed that it was involved in the collapse of Singaporean hedge fund Three Arrows Capital.

A 2019 comment on Voyager’s website said customers could receive full refunds following an event where USD funds were disrupted due to the failure of a borrower or bank partner.

This has been changed to state that in “a rare event”Customer funds are compromised and they are entitled to a refund of up to $250,000.

The administrator is asking Voyager to “take immediate action” to dispel “misinformation” about its position.

Meanwhile, the Toronto stock market has suspended trading of Voyager’s shares and is now facing a full write-off.

The company’s stock, which has fallen 75% in July, has also hit from the US’ OTCQX International platform to OTC Pink Papers, which has lower reporting and disclosure requirements.

Voyager’s VGX has been doing well, rising 30% in the past month but still trading 85% below its value at the start of the year, so far. to be appreciated it was 0.40 $.


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  • Sebastian Sinclair

    Blockworks

    Senior Correspondent, Asia News Desk

    Sebastian Sinclair is Blockworks’ senior reporter covering South East Asia. He has knowledge of the crypto market and other matters affecting the industry including regulation, sales and M&As. He currently has no cryptocurrencies. Contact Sebastian via email [email protected]