The U.S. Federal Trade Commission has submitted a court filing to prevent Voyager Digital’s bankruptcy plans from proceeding, as it would release the firm from liability related to misleading crypto marketing.

The FTC today announced that it is investigating bankrupt crypto brokerage Voyager Digital for false and discriminatory marketing of cryptocurrencies. The agency is asking the United States Bankruptcy Court to prevent Voyager’s bankruptcy plans from interfering with its investigation.

By not mentioning false representations and pretenses as one of the misdemeanors Voyager employees can be liable for, Voyager’s bankruptcy plan prevents government agencies like the FTC from bringing actions against parties it believes violated its rules. Furthermore, the FTC argues that not mentioning false marketing in the list of exclusions is inconsistent with U.S. Bankruptcy Code.

The FTC is the cop on the beat in U.S. marketing circles, enforcing laws that promote truthful advertising. Influencers must disclose any compensation for promotions.

Voyager Digital filed for bankruptcy in July 2022 after several debtors failed to repay loans, themselves stung by the sharp decline in crypto prices precipitated by the collapse of the TerraUSD stablecoin in May 2022 and the general apprehension about the crypto industry. Bankrupt crypto hedge fund Alameda Research tried to push itself up Voyager’s creditor priority list during the firm’s bankruptcy proceedings. Alameda allegedly lent money to Voyager Digital but took a hit when the firm couldn’t service its debt.

About 97% of Voyager creditors have approved selling the bankrupt crypto broker’s assets to the Binance.US. The voting window for the plan will close at 4 p.m. Eastern Time on Feb. 22, 2023. The Securities and Exchange Commission initially sought clarity from Binance.US on its financials and where it would get the money to buy Voyager’s assets.

The FTC’s Voyager probe adds the firm to a list of crypto companies Bloomberg reported the FTC was investigating in December 2022. 

However, before this, several cultural and marketing commentators pointed out red flags during last year’s crypto marketing blitz.

After the 2022 Super Bowl, where crypto companies like Crypto.com and FTX, flush with cash, shelled out up to $7 million for 30-second advertising slots, Jay Kang of the New York Times wrote, “I can no longer really tell the difference between buying cryptocurrencies or betting on sports or trading stocks. The narratives have all converged into one mega-gamble with payouts that could change your life.”

Guardian writer Ezra Marcus called the Super Bowl marketing malevolent and predatory for harnessing, predicting that the “crypto boom will eventually leave a generation of suckers holding the bag.” Allen Adamson of Metaforce, a marketing firm, said the ads did not promote the merits of crypto. Rather, he said they incited Fear Of Missing Out on the next big thing.

The Senate Banking Committee’s Office said the lack of crypto ads at Super Bowl 2023 validated its chair’s warnings.

Last year's Super Bowl was filled with crypto ads.@SenSherrodBrown warned people about the risks, scams, and fraud.

This Sunday, after the industry lost billions of dollars and left many Americans high and dry, there won't be a single crypto ad. pic.twitter.com/Zw7hltMhoe

At the time, though, guidelines around crypto advertising were less clear. NBCUniversal, the broadcaster of Super Bowl LVI, did not have crypto advertising guidelines. Instead, it had rules related to the marketing of pyramid schemes, get-rich-quick schemes and financial products and services.

Now, following the collapse of FTX, which spent heavily during the Super Bowl and celebrity endorsements in 2022 but filed for bankruptcy a few months ago, the FTC has a chance to set new crypto advertising rules to ensure U.S. customers are not left holding the bag.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

The post FTC Wants to Prevent Voyager Bankruptcy Plans From Interfering With New Probe appeared first on BeInCrypto.

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