Regulatory bodies, CFTC and FTC, file lawsuits against the past leader of Voyager Digital corporation.

Voyager Digital, a digital asset platform, and its former CEO, Stephen Ehrlich, have found themselves in the midst of legal troubles. Following the termination of Binance.US's planned acquisition of Voyager, the company announced its intention to return crypto and cash directly to customers through the Voyager platform.

The Commodity Futures Trading Commission (CFTC) has charged Ehrlich with fraud and registration failures, alleging that he and Voyager took shockingly reckless risks with customers' assets, leading to Voyager's bankruptcy and significant customer losses. The CFTC also accused Ehrlich and Voyager of claiming that the platform was a "safe haven" for customers to earn high-yield returns, a statement that the CFTC deemed false.

In a separate action, the Federal Trade Commission (FTC) sued Ehrlich and his wife, Francine Ehrlich, for claiming that customer accounts were "safe" and insured by the Federal Deposit Insurance Corp. The FTC reached a $1.65 billion settlement with Voyager, permanently banning it from handling consumer assets.

Ian McGinley, the director of enforcement at the CFTC, stated that the case against Ehrlich was another instance of holding a CEO accountable for a fraudulent digital asset platform. No comment was provided by a representative for Voyager regarding the recent developments.

Commissioner Caroline Pham of the CFTC disagreed with the agency's faulting of Voyager and Ehrlich for not registering as a "commodity pool operator". Pham argued that the CFTC's interpretation of a commodity pool operator in this enforcement action could include commonplace lending activity, which she considers an overreach.

FTX made a bid to buy Voyager in September 2022 following Voyager's bankruptcy, but the deal fell through following FTX's own bankruptcy filing. Ehrlich and Voyager concealed Voyager's true financial health from customers, continuing to lie to them as their business began to collapse, according to the CFTC.

Notably, Ehrlich has not agreed to a settlement and the case against him will move forward in federal court, the FTC said. The judgment will be suspended to allow Voyager to return the remaining assets to customers in its ongoing bankruptcy proceedings.

This case underscores the importance of regulatory oversight in the digital asset industry and the consequences of failing to comply with regulations. The CFTC's enforcement action serves as a reminder to all digital asset platforms to operate transparently and honestly, placing the interests of their customers first.

This article is about Technology and Regulations & Policy, discussing digital assets and the enforcement action by the CFTC and FTC. As of now, there is no information available about which institutions Stephen Ehrlich may have sued before resigning as CEO of Voyager Digital or about the FTC's penalty against Voyager.

Regulatory bodies, CFTC and FTC, file lawsuits against the past leader of Voyager Digital corporation.