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US Banking Regulators Demand Voyager Digital Remove ‘False’ Claims

Finance

cryptoknowmics.com 29 July 2022 05:08, UTC
  
Reading time: ~2 m

US banking authorities have issued a cease-and-desist order to cryptocurrency company Voyager Digital for making "false and misleading" representations about the government's protection of its clients' cash. The Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) stated in a formal letter that Voyager deceived clients into believing that their accounts were protected by the FDIC. The corporate spokeswoman did not respond immediately to the comment request.

Voyager Made Several Statements

According to the regulatory agencies, Voyager Digital and its executives made several statements suggesting that the company was FDIC-insured and that the FDIC would protect clients from Voyager's failure. In reality, the firm only had a savings account at Metropolitan Commercial Bank, and investors using the company's portal were not covered by the FDIC, according to the authorities. The regulators made this remark together:

"Based on the information gathered to date, it appears that these representations likely misled and were relied upon by customers who placed their funds with Voyager and do not have immediate access to their funds."

Voyager To Take Down All Deceptive Claims

Regulators commanded the business to take down all deceptive claims within two working days of receiving the notice, according to the letter delivered to the company management. The authorities additionally stated that this action would not bar them from pursuing more legal action against the company if the need arises. Voyager was among the cryptocurrency companies that struggled after the widespread turbulence in the market. Voyager claimed it had more than 100,000 creditors, between $1 billion and $10 billion in assets, and liabilities of the same amount when it filed for bankruptcy protection earlier this month.


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