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A Commodity Futures Trading Commission (CFTC) commissioner has slammed Voyager Digital, calling the company no better than a house of cards.
Commissioner Kristen Johnson stated that Voyager Digital made mistakes that led to the loss of billions of dollars in customer funds.
A House Of Cards
Commissioner Kristen Johnson, in his statement regarding the Commodity Futures and Trading Commission’s charges against Voyager Digital, said the company was no better than a house of cards, thanks to its monumental failures. These failures, Commissioner Johnson noted, led to the loss of billions in customer funds. The statement also accused Voyager of indulging in misleading practices, ignoring warnings, and conducting bare-bones due diligence.
“Contrary to that marketed image, Voyager and Ehrlich are alleged to have approved loans valued at hundreds of millions of dollars worth of customer assets to numerous third parties that, for example, made prominent disclaimers that investing with them had a “high degree of risk” that could result in investors losing all their money.”
The statement further added,
“Voyager is alleged to have conducted insufficient due diligence on these counterparties and to have wrongly determined that they were of low risk despite evidence to the contrary. When one of the counterparties defaulted on repaying a Voyager loan of roughly $650 million of customer funds, Ehrlich concealed from customers Voyager’s precarious financial position, omitted mention of the default, and continued to solicit deposits from new and existing customers.”
The commissioner also stated that Voyager turned a blind eye to what its subsidiary investment firms were doing with customer funds.
“It is astounding that Voyager failed to exert pressure on the firms where it invested its customers’ assets. Instead of demanding that investment firms that received customer assets offer greater levels of transparency, Voyager shirked the long-established expectations for custodians and simply dispatched customer funds with little effort to preserve the same.”
Former
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Author: Amara Khatri
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