FTC Reaches Settlement with Crypto Company Voyager Digital; Charges Former Executive with Falsely Claiming Consumers’ Deposits Were Insured by FDIC
The Federal Trade Commission (FTC) has recently made significant progress in its efforts to protect consumers in the cryptocurrency industry. The FTC announced a settlement with Voyager Digital, a bankrupt crypto company, and is filing charges against its former CEO, Stephen Ehrlich. The charges stem from allegations that Voyager and Ehrlich misled consumers by falsely claiming that their accounts were insured by the Federal Deposit Insurance Corporation (FDIC) and were “safe.”
The Complaint
According to the FTC, Voyager and Ehrlich engaged in deceptive practices by falsely advertising that customers’ cryptocurrency deposits were insured by the FDIC. In reality, the FDIC only provides insurance for traditional banking products, such as savings accounts and certificates of deposit, and does not extend coverage to cryptocurrency deposits. The complaint alleges that Voyager’s false claims gave consumers a false sense of security, leading them to deposit more than $1 billion in cryptocurrency with the company.
The Settlement with Voyager
Under the terms of the settlement, Voyager has agreed to a permanent ban from handling consumers’ assets. This means that the company will no longer be able to accept or hold any customer funds or assets. Additionally, Voyager must notify all affected customers about the settlement and the false deposit insurance claims. The company is also required to cooperate fully with the FTC in its ongoing litigation against Ehrlich.
The Charges against Former CEO Stephen Ehrlich
The FTC is filing charges against Stephen Ehrlich, the former CEO of Voyager, for his role in misleading consumers. According to the complaint, Ehrlich personally made false claims about FDIC insurance coverage to customers. These claims were made both verbally and in written materials, including on Voyager’s website and in marketing materials. If found guilty, Ehrlich could face significant penalties, including monetary fines and a ban from participating in the cryptocurrency industry.
Frequently Asked Questions
Q: What is Voyager Digital?
A: Voyager Digital is a cryptocurrency company that allowed consumers to buy, sell, and store various cryptocurrencies.
Q: What were the false claims made by Voyager and Stephen Ehrlich?
A: Voyager and Ehrlich falsely claimed that customers’ cryptocurrency deposits were insured by the FDIC, providing a sense of safety and security that was not accurate.
Q: How much cryptocurrency was lost by consumers due to Voyager’s collapse?
A: The complaint states that consumers lost more than $1 billion in cryptocurrency following Voyager’s bankruptcy.
Q: What is the FDIC and what does it cover?
A: The FDIC is the Federal Deposit Insurance Corporation, an independent agency of the United States government that insures deposits in banks and thrift institutions. The FDIC only provides insurance for traditional banking products, such as savings accounts and certificates of deposit.
Q: How will affected customers be notified about the settlement?
A: Voyager is required to notify all affected customers about the settlement and the false deposit insurance claims. The specific methods of notification will be determined by the FTC.
Q: What are the potential penalties for Stephen Ehrlich?
A: If found guilty, Ehrlich could face significant penalties, including monetary fines and a ban from participating in the cryptocurrency industry.
In conclusion, the FTC’s settlement with Voyager Digital and charges against former CEO Stephen Ehrlich highlight the importance of transparency and accuracy in the cryptocurrency industry. Consumers must be able to trust that their investments are secure and protected, and false claims of deposit insurance undermine that trust. The FTC’s actions send a strong message that misleading practices will not be tolerated, and further steps may be taken to safeguard consumers in the evolving world of cryptocurrencies.
For more information about secure banking options, please visit [VisBanking](https://visbanking.com/).
To learn about our pricing, click [here](https://visbanking.com/pricing/).
If you would like to request a demo of our services, please visit [this page](https://visbanking.com/request-demo/).
0 Comments