FTC Secures $1.65 Billion Settlement Against Voyager Digital

The United States Federal Trade Commission (FTC) has obtained approval from a federal magistrate for an order mandating $1.65 billion in monetary relief from crypto lending company Voyager Digital and its affiliates.

Judge Gregory Woods ordered Voyager to pay $1.65 billion in a settlement order dated November 28 in the U.S. District Court for the Southern District of New York, which was issued in October and involved the lending firm and the FTC.

In accordance with the terms of the agreement, Voyager shall be “permanently restrained and enjoined” from engaging in the promotion or provision of services or products associated with digital assets.

Source: PACER

Voyager filed for Chapter 11 protection in July 2022 and disclosed liabilities ranging from $1 billion to $10 billion, according to Judge Woods. The order is not expected to significantly affect the proceedings in bankruptcy court.

In May, the court approved the lending institution’s initial reimbursement of 35.72% of Voyager users’ claims.

Partially affiliated parties with Voyager are obligated to provide testimony at hearings, trials, and discovery in support of the FTC, as stipulated in the settlement.

Subject to commission oversight, Voyager is additionally obligated to submit a report on its adherence to the proceedings after a period of one year has passed.

and the FTC launched parallel litigation against Stephen Ehrlich, the former CEO of Voyager, in October.

These lawsuits accuse Ehrlich of distorting information pertaining to the security and utilization of customer funds.

The Voyager crew “consistently communicated and worked closely” with regulators, according to Ehrlich, who at the time largely denied the allegations.

The FTC imposed a $4.7 billion fee order on crypto lending firm Celsius in July, alleging that the co-founders of the company misappropriated user assets and misled investors regarding the platform’s services.

Alex Mashinsky, the former CEO of Celsius, was apprehended by U.S. authorities. pending his September 2024 trial, he is currently released on bond.