Judge Signs Off on $1.65B Settlement Between Voyager Digital and FTC

Judge Signs Off on $1.65B Settlement Between Voyager Digital and FTC – A federal judge has given the green light to an order mandating Voyager Digital, a crypto lending firm, and its associates to pay $1.65 billion in monetary restitution to the United States Federal Trade Commission (FTC). Although the settlement with the FTC was initially disclosed in October, it does not conclude the ongoing case involving the former CEO, Stephen Ehrlich, with the CFTC.

On November 28, in a filing with the U.S. District Court for the Southern District of New York, Judge Gregory Woods mandated that Voyager pays $1.65 billion as part of the settlement reached between the lending firm and the FTC, which was initially announced in October. As part of the agreement, Voyager will be “permanently restrained and enjoined” from marketing or providing products or services related to digital assets.

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Judge Woods stated that the order is expected to have minimal impact on bankruptcy court proceedings, where Voyager sought Chapter 11 protection in July 2022, revealing liabilities between $1 billion and $10 billion. In May, the court endorsed a plan enabling Voyager users to initially receive 35.72% of their claims from the lending firm. 

As part of the settlement, individuals linked to Voyager are required to collaborate with FTC officials, providing testimony during hearings, trials, and discovery. Additionally, Voyager is obligated to report its compliance with the proceedings after one year, with the commission overseeing the monitoring process. 

In October, both the U.S. Commodity Futures Trading Commission and the FTC initiated separate legal actions against former Voyager CEO Stephen Ehrlich. Accusing him of issuing deceptive statements about the utilization and safety of customer funds. Ehrlich, during that period, contended that Voyager’s team had consistently collaborated with regulators, largely refuting the allegations.

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Similarly, in July, the FTC directed crypto lending firm Celsius to pay $4.7 billion in fees, alleging that the company’s co-founders misused user assets and provided misleading information to investors about the platform’s services. Former Celsius CEO Alex Mashinsky, who was apprehended by U.S. officials, is currently free on bail pending his trial, set to commence in September 2024.

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