The U.S. Commodity Futures Trading Commission on Thursday sued former CEO and co-founder of Voyager Digital Ltd (VYGVQ.PK) Stephen Ehrlich for fraudulently soliciting participation in and running a digital asset platform in a manner that led to the firm's demise.
The CFTC accused Voyager and Ehrlich of promising a safe haven for customers' digital assets stored on their platform - at times valued at more $2 billion - while taking "excessive risks" with them behind the scenes. That led to the firm's bankruptcy and owing U.S. customers more than $1.7 billion, regulators said in their lawsuit, filing in federal court in New York.
Ehrlich could not be reached immediately for comment and Voyager did not respond immediately to a request for comment.
The Federal Trade Commission also announced a settlement with Voyager that will permanently ban it from handling consumers’ assets. It is filing suit against Ehrlich for falsely claiming that customers’ accounts were insured by the Federal Deposit Insurance Corporation (FDIC) and were “safe,” even as the company was approaching bankruptcy.
The FTC's complaint also names Stephen Ehrlich’s wife, Francine Ehrlich, as a relief defendant.
Voyager was one of several crypto lenders to collapse in 2022, along with Celsius Network and BlockFi, after crypto prices plummeted amid rising interest rates and worsening macroeconomic conditions.
