In a recent development, a federal judge has given the green light to an order mandating Voyager Digital, a cryptocurrency lending company, and its related entities to pay $1.65 billion in monetary relief to the U.S. Federal Trade Commission (FTC). This action stems from a settlement disclosed in October, with the order being issued by Judge Gregory Woods on November 28 in the U.S. District Court for the Southern District of New York. As part of the settlement, Voyager is permanently restricted from marketing or providing services tied to digital assets.
Judge Woods clarified that this order would not significantly impact the ongoing bankruptcy proceedings. Voyager had previously filed for Chapter 11 bankruptcy protection in July 2022, citing liabilities between $1 billion to $10 billion. An earlier court-approved plan aimed to allow Voyager users to initially receive approximately 35.72% of their claims from the lending company. The settlement also requires parties linked to Voyager to collaborate with FTC officials, including participating in hearings, trials, and discovery processes. Additionally, Voyager must adhere to compliance procedures and face oversight by the commission for at least a year.
Notably, in October, both the U.S. Commodity Futures Trading Commission and the Federal Trade Commission filed separate lawsuits against former Voyager CEO Stephen Ehrlich. They accused him of issuing misleading statements regarding the usage and safety of customer funds. Despite Ehrlich asserting ongoing communication and cooperation with regulators, he largely contested the accusations against Voyager.
Earlier in July, the FTC had directed another cryptocurrency lending company, Celsius, to pay $4.7 billion, alleging the misappropriation of user assets and misleading investors about the platform's services. The former CEO of Celsius, Alex Mashinsky, was arrested by U.S. authorities and is presently out on bail awaiting trial, scheduled to commence in September 2024.
