The US Federal Trade Commission, or FTC, said it had launched an investigation into crypto-lending firm Voyager Digital in parallel to the company’s bankruptcy proceedings.
In a February 22 filing in the US Bankruptcy Court for the Southern District of New York, the FTC saying was investigating Voyager and its employees “for their deceptive and unfair marketing of cryptocurrency to the public.” The announcement followed bankruptcy judge Michael Wiles, who initially approved a plan in which Voyager’s debtors would sell the company’s assets to Binance.US for more than $1 billion.
According to the FTC filing, an objection to the debtors’ plan, the commission argued that some of the parties involved in Voyager’s bankruptcy proceedings should not be exempt from certain financial claims, “including debts for ‘misrepresentation ‘ and ‘false pretenses'”. :
“By not excluding, among other things, false pretenses and misrepresentations, the release can be construed as interfering with the causes of action of a government unit such as the FTC. this is inadmissible […] the FTC respectfully requests that the Court deny confirmation of the Debtors’ Proposed Plan.”
New @FTC Analysis shows that cryptocurrency scams are proliferating, with approximately 1 in 4 reported dollars lost to fraud paid in cryptocurrency.
Since the beginning of 2021, consumers have reported losing over $1 billion worth of crypto to scams.https://t.co/AnWqzj93jK
—Lina Khan (@linakhanFTC) June 3, 2022
Voyager filed for Chapter 11 bankruptcy in the United States in July 2022 ahead of similar filings from Celsius Network, FTX, and BlockFi. One of the proposed plans to restructure the company would be for Binance.US to acquire Voyager’s assets, but the move has been opposed by the US Securities and Exchange Commission, citing a lack of “necessary information.”
Related: Voyager creditors send SBF a summons to appear in court for ‘remote deposition’
Bankruptcy proceedings for Celsius and FTX are also ongoing, with their respective CEOs Alex Mashinsky and Sam Bankman-Fried facing scrutiny from US authorities for their alleged actions before the companies filed for Chapter 11. According to the restructuring plan proposed by Celsius, more than 85% of users were expected to recover approximately 70% of their funds.
