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Crypto lender Voyager ordered to stop misleading claims over deposit insurance

Legal

forkast.news 29 July 2022 03:55, UTC
  
Reading time: ~2 m

U.S. banking regulators have ordered crypto lender Voyager Digital to stop making “false and misleading” claims that its customer’s funds were insured by the government.

Fast facts

  • The Federal Reserve and the Federal Deposit Insurance Corp (FDIC) outlined their concerns in a letter sent to Voyager on Thursday.
  • They said that Voyager had falsely claimed itself and its customer’s funds to be insured by the FDIC and that customers were insured by the government corporation in the event of Voyager’s collapse.
  • Voyager maintains at least one deposit account at the FDIC-insured Metropolitan Commercial Bank in New York, but this coverage does not extend to its customers, the regulators said.
  • “It appears that the representations likely misled and were relied upon by customers who placed their funds with Voyager and do not have immediate access to their funds,” the regulators said in the letter.
  • The regulators “demanded” Voyager remove all material that suggested the above concerns and within two days provide written confirmation of compliance.
  • Voyager filed for Chapter 11 bankruptcy in New York in early July after halting customer transactions on its platform amid the contagion hedge fund Three Arrows Capital.

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