Last Updated on October 13, 2023 by Bitfinsider
Stephen Ehrlich, co-founder of Voyager Digital, was charged with fraud and failure to register with the Commodity Futures Trading Commission.
Ehrlich and his firm misled to consumers and then continued to lie as Voyager began to fail in order to conceal the crypto lender’s true financial state, according to the CFTC.
“While representing that they would treat customers’ digital asset commodities safely and responsibly, behind the scenes, they took shockingly reckless risks with their customers’ assets, leading to Voyager’s bankruptcy and huge customer losses,” CFTC Enforcement Director Ian McGinley said in a statement on Thursday.
Between February 2022 and July 2022, Ehrlich and Voyager “engaged in a scheme to defraud customers by misrepresenting the safety and financial health of the Voyager digital asset platform,” according to the agency.
Ehrlich promised customers high-yield returns of up to 12%, and in order to generate that income to pay customers the returns, Ehrlich and Voyager pooled customer funds and transferred “billions of dollars’ worth of customers’ digital asset commodities as ‘loans’ to high-risk third parties,” according to the CFTC.
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