“I’m Being Targeted Unfairly,” Claims Ex-Voyager CEO in Light of CFTC Lawsuit

Allegations Against Ehrlich’s Business Practices

Central to the CFTC’s grievance is the claim that Ehrlich misrepresented Voyager’s fiscal health to its users while operating without mandatory registrations.

Furthermore, the FTC alleges that Ehrlich falsely assured clients that their investments were shielded by the Federal Deposit Insurance Corp.

Ian McGinley, the CFTC’s enforcement chief, commented, “Ehrlich and Voyager lied to Voyager customers,” pinpointing the hazardous undertakings which culminated in significant financial losses and the eventual bankruptcy of Voyager in July 2022. Ehrlich could potentially face financial penalties, reparations, and even an industry-wide ban as per the CFTC’s suit.

CFTC’s Stance Challenged by Its Own Commissioner

Caroline Pham, a commissioner at the CFTC, expressed dissent regarding the lawsuit, deeming the agency’s view that Voyager should have enrolled as a commodity pool operator as a misinterpretation of existing regulations.

She articulated, “Such an interpretation is an overreach beyond our statutory authority and would disrupt well-established legal and regulatory frameworks for lending to institutions and consumer finance.”

By initiating this lawsuit, the CFTC reaffirmed its classification of certain digital currencies, including BTC and USDC, as commodities, echoing prior announcements.

FTC Reaches Settlement with Voyager

A prior settlement between the FTC and Voyager Digital saw the imposition of a deferred judgment of $1.65 billion on the latter. Consequently, Voyager is now permanently barred from overseeing customer investments. However, this settlement facilitates Voyager’s asset liquidation to compensate its clients.

Underlining the importance of genuine claims regarding FDIC coverage, Samuel Levine, the head of the FTC’s Bureau of Consumer Protection, warned, “This action reminds companies and individuals: Don’t play fast and loose with claims about FDIC insurance.”

The controversy enveloping Voyager Digital can be traced back to its financial debacle in July 2022. An initially hopeful acquisition by FTX did not materialize, nor did subsequent talks with Binance. Current projections suggest that former clients of Voyager might only be able to salvage approximately 36% of their total investments.