Crypto lender Voyager Digital has been directed to take away “false and deceptive” statements that its person’s deposit accounts are FDIC insured.
In a joint letter written on Thursday by Seth Rosebrock and Jason Gonzalez, assistant normal counsel on the Federal Reserve and the Federal Deposit Insurance coverage Company (FDIC) to Voyager Digital, the authors stated the representations “doubtless misled and had been relied upon” by prospects who positioned funds with Voyager who now now not have entry to it:
“These representations are false and deceptive and, primarily based on the data we now have so far, it seems that the representations doubtless misled and had been relied upon by prospects who positioned their funds with Voyager and should not have speedy entry to their funds.”
The Fed and FDIC allege that Voyager “made varied representations on-line, together with its web site, cell app, and social media accounts” which recommended it was:
“(1) Voyager itself is FDIC-insured; (2) prospects who invested with the Voyager cryptocurrency platform would obtain FDIC insurance coverage protection for all funds supplied to, held by, on, or with Voyager; and (3) the FDIC would insure prospects towards the failure of Voyager itself.”
The letter moreover demanded that Voyager present written affirmation of its compliance with the regulator’s requests inside two enterprise days, and supply a full itemizing of all statements concerning any reference to FDIC insurance coverage inside 10 days.
It additionally warned that even when Voyager met the calls for outlined within the cease-and-desist letter, it gained’t preclude the regulator from taking additional motion if deemed applicable.
Voyager’s web site presently states that it has labored with the FDIC to replace and make clear the language surrounding FDIC insurance coverage on its web site in early 2021 and early 2022.
At present, the language surrounding FDIC insurance coverage states that United States greenback in Voyager money account is held at Metropolitan Business Financial institution (MCB) and is FDIC insured:
“FDIC insurance coverage doesn’t defend towards the failure of Voyager, however to be clear: Voyager doesn’t maintain buyer money, that money is held at MCB.”
Cointelegraph reached out to Voyager for remark however didn’t obtain a direct response by the point of publication.
Solely July 6, Voyager Digital filed for chapter, citing money owed of as much as $10 billion to roughly 100,000 collectors amid market turmoil initially attributable to the collapse of the Terra ecosystem and subsequently worsened as Singaporean hedge fund Three Arrows Capital (3AC) defaulted on a $670 million mortgage on