CFTC Might Take Legal Action Against Ex-Voyager Boss

The Commodity Futures Trading Commission’s (CFTC) investigators have determined that Voyager Digital Ltd.’s co-founder, Stephen Ehrlich breached regulations before the cryptocurrency lender’s bankruptcy last year.

CFTC Might Take Action Against Ex-Voyager CEO

As per the report by bloomberg, the enforcement division of the CFTC’s staff has made an internal recommendation to charge Ehrlich with violations of derivatives regulations, alleging that he misled customers regarding the security of their assets after an investigation. Five CFTC commissioners are in the process of voting on whether to authorize an enforcement action against him.

Voyager CEO is Disappointed in CFTC

In response to the news, Ehrlich conveyed his frustration and bewilderment through an emailed statement to Bloomberg. He expressed his anger and confusion regarding the anticipated civil claims by the government and asserted that he considers them to be without merit.

He wrote: “These allegations appear to be one of those times where the referees are making new rules and calling foul after the game has ended. I look forward to being vindicated in court.” He noted: “Day in and day out, Voyager worked closely with the relevant regulators.”

Collapse of Voyager Digital

Recall a market decline initiated in May 2022 as a consequence of the Terra blockchain’s collapse, leading to a loss of $40 billion in market value. As a result, in July of the previous year, Voyager Digital submitted a Chapter 11 bankruptcy filing to the U.S. Bankruptcy Court for the Southern District of New York. This move came shortly after the platform initially suspended withdrawals. 

Acquisition of Assets

Following its bankruptcy, several companies competed to acquire the assets of the insolvent cryptocurrency lender. Subsequently, Binance.US made headlines by reportedly offering $1.022 billion to acquire these assets. However, the SEC raised objections to Binance.US’s proposed acquisition of Voyager Digital’s assets. In April of this year, Binance.US ultimately canceled its buyout agreement with Voyager Digital.