The agreement between the cryptocurrency lending company and the Federal Trade Commission (FTC) was initially disclosed in October and did not conclude the ongoing legal matter involving the former CEO, Stephen Ehrlich, with the Commodity Futures Trading Commission (CFTC).
Judge Greenlights Voyager’s $1.65B Restitution
A judge at the federal level has given the green light to a directive mandating Voyager Digital, a cryptocurrency lending company, and its associated entities to furnish $1.65 billion in financial restitution to the Federal Trade Commission (FTC) in the United States.
On November 28, a submission was made in the U.S. District Court for the Southern District of New York, where Judge Gregory Woods directed Voyager to remit $1.65 billion. This ruling stems from an agreement reached between the lending company and the FTC, initially disclosed in October.
Under the terms of the agreement, Voyager is obligated to be “perpetually restricted and confined” from engaging in the promotion or provision of products or services associated with digital assets.
As per Judge Woods, the directive is anticipated to have minimal influence on the proceedings within the bankruptcy court, where in July 2022 Voyager submitted for Chapter 11 safeguarding. During this filing, the company revealed liabilities encompassing a spectrum from $1 billion to $10 billion. During the month of May, the court sanctioned a proposal permitting users of Voyager to initially acquire 35.72% of their assertions from the lending firm.
As part of the agreement, entities affiliated with Voyager are obliged to collaborate with officials from the Federal Trade Commission (FTC), which encompasses providing testimony during hearings, trials, and the discovery process. Twelve months later, Voyager is required to submit a report regarding its adherence to the ongoing proceedings, a process that will be subject to surveillance by the commission.
Voyager Faces Multiple Challenges
During the month of October, both the U.S. Commodity Futures Trading Commission and the Federal Trade Commission simultaneously initiated legal actions against the ex-CEO of Voyager, Stephen Ehrlich.
The allegations put forth assert that he issued deceptive statements concerning the utilization and security of customer funds. During that period, Ehrlich contended that the team at Voyager consistently maintained communication and collaborated closely with regulatory bodies. He vehemently refuted the majority of the allegations.
In the month of July, the Federal Trade Commission (FTC) mandated that Celsius, a cryptocurrency lending firm, remit fees totalling $4.7 billion. The allegations set forth by the FTC assert that the company’s co-founders improperly diverted user assets and provided deceptive information to investors regarding the services offered by the platform.
In the hands of U.S. law enforcement, former Celsius CEO Alex Mashinsky finds himself under arrest, yet he presently maintains his freedom on bail, a prelude to the impending trial scheduled to unfold in September 2024.
This legal course of action follows the allegations brought forth by American officials against Mashinsky, shaping a narrative that will unfold in the courtroom in the months to come. The ongoing legal disputes surrounding Voyager Digital, Celsius, and their leadership highlight the dynamic changes in cryptocurrency regulation.
These unfolding stories in courtrooms play a crucial role in influencing the course of the industry, shaping its future, and establishing the standards expected from its participants.