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Voyager Digital has been given a cease and desist order by the New Jersey Bureau of Securities for marketing unregistered securities through its Voyager Earn program.
New Jersey’s action is the latest in a string of rulings and complaints in the United States against crypto-based interest-bearing account issuers.
The shady promise of interest rates of a total of 12 percent
Voyager Digital (VGX) is crypto-based staking, trading, and lending network that is centralized.
New Jersey states that its residents have 52,800 accounts and $187 million in assets on Voyager, out of a total of 1.5 million active accounts and $5 billion in assets.
The claim messages on Voyager’s webpage, which encourage users to “build your portfolio” and “travel to the new frontier of investment,” are cited by the Bureau as proof.
Because of the promise of interest rates as high as 12 percent, the order contends that each of the crypto staking and lending accounts issued through the scheme since 2019 is unregistered security.
The program’s marketing tactics were also questioned, with regulators claiming that ads for the program neglected to disclose that Voyager Digital LLC, the program’s parent firm, is a publicly-traded corporation in Canada, not the United States. According to the order, this “creates a false impression about Voyager Digital, LLC’s regulatory status.”
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Why Voyager claims are “shady”
While Voyager claimed to be licensed, the Bureau claims that it was only licensed in a few places to serve as a “money services firm,” which does not allow for the sale of unregistered securities.
At least five other states, including Alabama, Oklahoma, Texas, Kentucky, and Vermont, have issued orders or asked Voyager to explain how it is not offering unregistered securities if it wants to stay in business.
This is the latest in a long line of such cases or orders against cryptocurrency companies that offer interest-bearing accounts to their customers.
The Securities and Exchange Commission (SEC) threatened to sue Coinbase if it launched its much-awaited Coinbase Lend program in September of last year.
This product would have been similar to the interest-bearing accounts for crypto lenders offered by Blockfi and Voyager. Coinbase CEO Brian Armstrong termed the SEC’s actions “very shady” at the moment, citing the threat’s lack of legal claims.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
