The Federal Reserve and Federal Deposit Insurance Corporation possess ordered the bankrupt crypto platform Voyager to stay deceptive its customers about its deposit insurance coverage position.
Key Takeaways
- The Federal Reserve and Federal Deposit Insurance Corporation despatched a stay and desist advise to Voyager Digital Thursday. It ordered the crypto lender to stay deceptive its customers and desire away all references about being insured by the authorities.
- Based entirely on the companies, Voyager shared “spurious and deceptive” claims and references about being FDIC-insured on a few occasions.
- The regulators additionally gave Voyager two days to acknowledge with a letter outlining the total steps the agency has taken to conform to the advise.
The two institutions known as Voyager’s deposit insurance coverage claims “spurious and deceptive.”
Voyager Ordered to Discontinue Misleading Clients
Voyager Digital allegedly lied to its customers that the authorities was insuring its deposits.
The Federal Reserve and the Federal Deposit Insurance Corporation possess issued a stay and desist advise urging the embattled crypto lender to stay telling its customers their funds are insured by the authorities. In a joint letter published Thursday, the U.S. banking regulators said that the bankrupt dealer made a lot of “spurious and deceptive” statements referring to the FDIC insurance coverage position of the agency and its customers’ deposits. The letter said:
“Voyager has made a lot of representations on-line, along with its web position, mobile app, and social media accounts, declaring or suggesting that: (1) Voyager itself is FDIC-insured; (2) customers who invested with the Voyager cryptocurrency platform would bag FDIC insurance coverage coverage for all funds offered to, held by, on, or with Voyager; and (3) the FDIC would insure customers against the failure of Voyager itself.”
Beget you ever heard? USD held with Voyager is FDIC insured up to $250Okay. Our customers’ security is our high precedence. Launch rising your crypto portfolio this day.
— Voyager (@investvoyager) November 12, 2020
Voyager has claimed on a few occasions that its funds are insured by the FDIC. “USD held with Voyager is FDIC insured up to $250Okay. Our customers’ security is our high precedence. Launch rising your crypto portfolio this day,” the company posted in a November 2020 tweet.
On July 8, the FDIC probed Voyager for claiming it was FDIC-insured thru its partnership with the Metropolitan Industrial Monetary institution. While Voyager maintained deposit accounts with the FDIC-insured bank, the companies clarified that “Voyager is now not itself insured by the FDIC,” that manner that depositors had been now not stable against the dealer’s failure.
Based entirely on the companies, Voyager’s public claims likely misled many consumers into investing with the agency below the spurious affect that the authorities had insured their funds. The regulators ordered the dealer to straight desire away all public statements and references suggesting FDIC coverage of the agency or its customers’ deposits and send a letter to the companies outlining the total steps it took to conform to the directive.
Voyager filed for Chapter 11 financial damage on July 6 after the now-bankrupt hedge fund Three Arrows Capital defaulted on a $665 million loan from the dealer. On July 22, the cryptocurrency alternate FTX offered to raise the agency’s crypto assets and loans—moreover loans to Three Arrows—and exhaust them to reimburse customers tormented by the financial damage straight. However, Voyager’s lawyers refused FTX’s buyout proposal, calling it a “low-ball repeat dressed up as a white knight rescue.”
Disclosure: On the time of writing, the author of this text owned ETH and quite a lot of other other cryptocurrencies.
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