BTC-Newswire

Why the CFTC Sued the Former CEO of Crypto Lender Voyager

Press Releases Crypto News BeInCrypto Why the CFTC Sued the Former CEO of Crypto Lender Voyager

The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Stephen Ehrlich, the co-founder and former CEO of crypto lender Voyager Digital Ltd., alleging violations of derivatives rules during his tenure at the now-bankrupt cryptocurrency lending platform.

The federal lawsuit, lodged in New York, accuses Ehrlich and Voyager of misguiding customers by portraying the platform as a “safe haven” for their digital assets.

CFTC Sues Crypto Lender Voyager Ex-CEO Stephen Ehrlich

The CFTC’s legal move comes after an investigation concluded that Stephen Ehrlich, the co-founder and former CEO of Voyager Digital Ltd., had breached agency rules. The watchdog’s commissioners were deliberating on greenlighting an enforcement action against Ehrlich, spotlighting regulatory scrutiny in the crypto lending domain.

“Ehrlich and Voyager lied to Voyager customers. While representing 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. When their business began to collapse, they continued lying to their customers, concealing Voyager’s true financial health. Amplifying their fraud, Ehrlich and Voyager broke their trust with customers while acting in capacities that required CFTC registration, which they failed to obtain,” CFTC Director of Enforcement Ian McGinley said.

This lawsuit underscores the increasing regulatory vigilance within the crypto industry, particularly targeting misleading practices that could potentially harm investors. The case against Ehrlich exemplifies the hurdles crypto lending platforms might face amidst the evolving regulatory framework.

Ehrlich’s case with the CFTC is emblematic of the broader challenges the crypto industry confronts. Regulators seek to ensure adherence to established financial norms and protect investor interests.