Cypto lender Voyager Digital has been directed to remove “false and misleading” statements that its user’s deposit accounts are FDIC insured.
In a joint letter written on July 28 by Seth Rosebrockfrom & Jason Gonzalez, Assistant General Counsel at the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) to Voyager Digital, the authors said the representations “likely misled and were relied upon” by customers who placed funds with Voyager who now no longer have access to it.
“These representations are false and misleading and, based on the information we have to date, it appears that the representations likely misled and were relied upon by customers who placed their funds with Voyager and do not have immediate access to their funds.”
The Fed and FDIC allege that Voyager “made various representations online, including its website, mobile app, and social media accounts” which suggested it was:
“(1) Voyager itself is FDIC-insured; (2) customers who invested with the Voyager cryptocurrency platform would receive FDIC insurance coverage for all funds provided to, held by, on, or with Voyager; and (3) the FDIC would insure customers against the failure of Voyager itself.”
The letter additionally demanded that Voyager provide written confirmation of its compliance with the regulator’s requests within two business days, and provide a full listing of all statements regarding any reference to FDIC insurance within 10 days.
It also warned that even if Voyager met the demands outlined in the cease-and-desist letter, it won’t preclude the regulator from taking further action if deemed appropriate.
Voyager’s website currently states that it has worked with the FDIC to update and clarify language surrounding FDIC insurance on its website in early 2021 and early 2022.
Currently, the language surrounding FDIC insurance states that USD in Voyager cash account is held at Metropolitan Commercial Bank (MCB) and is FDIC insured.
“FDIC insurance does not protect against the failure of Voyager, but to be clear: Voyager does not hold customer cash, that cash is held at MCB.”
Cointelegraph reached out to Voyager for comment but did not receive an immediate response by the time of publication.
Only July 6, Voyager Digital filed for bankruptcy, citing debts of up to $10 billion to roughly 100,000 creditors amidst market turmoil initially caused by the collapse of the Terra ecosystem and subsequently worsened as Singaporean hedge fund Three Arrows Capital (3AC) defaulted on a $670 million loan on
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