US Regulators Targets Ex Voyager CEO

Stephen Ehrlich, once a CEO at Voyager Digital, is in hot water with two U.S. regulatory groups who claim that  he misled customers and falsely claimed their funds were protected by the government.

Voyager Digital, a company that worked with cryptocurrency, is under investigation and has declared bankruptcy, which is when a company says it cannot pay its debts, following trouble in the 2022 market.

On October 12, a group called the Federal Trade Commission (FTC) announced that it was suing Ehrlich. The FTC states that Ehrlich wrongly told Voyager customers in a letter in June 2022 that their money was insured and safe with the Federal Deposit Insurance Corporation (FDIC). But, two weeks later, customers couldn’t access their accounts. The complaint also claims that Ehrlich transferred lots of money, some linked to these alleged illegal activities, to his wife, Francine. The FTC has now banned Voyager from handling customer deposits and settled for a fine of $1.65 billion. However, this large amount has been paused to let the company pay its customers back first.

In another legal move, the Commodity Futures Trading Commission (CFTC), another regulatory group, has also filed charges against Ehrlich. They say he controlled Voyager’s operation of a financial pool without proper registration. The CFTC accuses Ehrlich of wrongly promoting the Voyager platform as a “safe haven” for customers to get high profits, which persuaded them to buy and store digital money with the company. However, one Commissioner, Caroline Pham, disagreed with this legal action, arguing that requiring Voyager to register as a certain kind of operator doesn’t align with the law.