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- 1 The CFTC seeks to take action against the CEO of Voyager, Stephen Ehrlich.
- 2 Ehlrich misled customers about the safety of their assets on his platform, Voyager Digital.
- 3 Ehlrich swears to be innocent and claims to be a scapegoat for individuals from various companies.
The United States Commodities and Futures Trading Commission (CFTC) is reportedly considering taking action against the co-founder and CEO of Voyager. The potential enforcement action will be in the wake of the agency’s investigation. It found that the executive broke federal laws as he misled customers about safety on the platform.
Stephen Ehrlich, who co-founded crypto lending firm Voyager Digital, and was the chief executive officer when the company filed for bankruptcy. The investigators at the enforcement division of the CFTC came to the conclusion that Ehrlich broke the derivatives regulations.
Bloomberg reported citing people with knowledge about the matter that the US regulator is now seeking to make accusations against Ehrlich. The allegations were said to include breaking rules as he deluded the customers on the company’s platform about the safety of crypto assets.
One instance was when Voyager was facing an investigation and customers were apparently concerned about their assets with the company. Ehrlich was making efforts to make people believe that the assets were safe despite the probe. Now, the regulator seems to surround the executive for his actions.
In a statement, Ehrlich, who has dedicated a significant portion of his career to working in regulated markets and has a track record of over a decade at public companies, emphasized that his professional record has remained untarnished.
He expressed his belief that he was being unfairly targeted and used as a scapegoat for the misconduct of individuals associated with different companies. This statement underscores Ehrlich’s assertion of his innocence and raises questions about accountability and responsibility within regulated markets.
Voyager Fell Victim of Terra (LUNA) Fall
Once a prominent crypto lending firm, Voyager Digital, fell victim to the heavy ripple effect of the massive explosion of the Terra (LUNA) network. Terra network, home to two leading cryptocurrencies LUNA and UST stablecoin, diminished as the stablecoin lost the peg against USD ultimately leading the whole system to drown.
LUNA and UST stablecoin were among the top cryptocurrencies of their time and had amassed billions of dollars in market cap. Once they started declining, billions of dollars worth of investors’ assets evaporated. The trust in the broader crypto market shook and people started pulling out their money from it.
The scale of outflow got big enough that it resulted in many prominent crypto firms being burnt in the heat. Other than Voyager, Celsius, and BlockFi-like companies also witnessed destructive withdrawals and ended up filing for bankruptcy in 2022.
All these Terra network mishap-victim companies are going through bankruptcy procedures and Voyager is among them. Though the procedure of restructuring the business continues under the federal court’s watch, the recent development of possible regulatory action against the company executive is likely to be a crucial development.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
