CFTC Seeks to Initiate Legal Action Against Voyager CEO
- The CFTC is looking to initiate a legal action against the former CEO of Voyager Digital, a crypto lending firm.
- The agency conducted an investigation into Stephen Ehrlich and believes he violated derivatives laws.
- Ehrlich was “angered and perplexed” after gaining knowledge about the regulator’s intentions.
- Voyager is currently under investigation from the United States Federal Trade Commission (FTC).
The Commodity Futures Trading Commission (CFTC) of the United States is considering launching a legal action against the CEO of bankrupt crypto lending platform Voyager Digital, which is currently facing trouble while selling its assets to pay off the creditors of the platform. Interestingly, the firm filed for bankruptcy last year during the peak of the crypto bear market.
According to a Bloomberg report published on October 6, the CFTC might soon take legal action against Stephen Ehrlich, the former CEO of Voyager Digital, after conducting investigations that concluded that the executive was responsible for violating several of the US derivatives laws before his firm actually filed for bankruptcy.
It is important to mention here that Voyager Digital filed for bankruptcy in July 2022 amid the crypto market downturn. Bankrupt crypto exchange FTX showed interest in purchasing the assets belonging to Voyager but faced tough resistance from the US arm of the world’s largest crypto exchange, Binance.US.
The Bloomberg report noted that Ehrlich was “angered and perplexed” after gaining knowledge about the intention of the CFTC:
“These allegations appear to be one of those times where the referees are making new rules and calling foul after the game has ended.”
On the other hand, Voyager is currently under investigation from the United States Federal Trade Commission “for [its] deceptive and unfair marketing of cryptocurrency to the public.” While a bankruptcy court allowed the lending platform to repay its customers, the case is still ongoing, and it is unclear what the future holds for the company.
While CFTC has had its share of enforcement actions against crypto firms in the United States, the Securities and Exchange Commission (SEC) has been taking the lead. However, the derivatives regulator has targeted decentralized finance (DeFi) protocols, including Opyn, ZeroEx, and Deridex. Fines worth $250,000, $200,000, and $100,000, respectively, were dished out against these firms.
Coinbase CEO Brian Armstrong asked DeFi protocols to challenge the CFTC in court after the recent wins of Ripple and Grayscale against the SEC.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
