2023-10-7 01:00 |
Stephen Ehrlich, the co-founder of Voyager Digital, is reportedly under investigation by the US Commodity Futures Trading Commission (CFTC) for alleged violations of derivatives regulations.
Bloomberg has revealed that the CFTC’s enforcement division staff conducted a probe into Ehrlich’s conduct, concluding that he misled customers regarding the safety of their assets.
Voyager Co-founder Found In Violation Of Derivatives RegulationsAccording to Bloomberg, the CFTC’s investigation focused on Stephen Ehrlich’s purported violations of derivatives regulations, specifically related to customer asset safety. It is alleged that Ehrlich misled customers about the security of their assets, which may have contributed to the collapse of Voyager Digital.
The investigation aims to determine whether Ehrlich’s actions violated CFTC rules and regulations governing the cryptocurrency industry.
Notably, Ehrlich expressed perplexity in response to the allegations made by the CFTC. He told Bloomberg that he was taken aback by the anticipated civil claims and labeled them unfounded.
Ehrlich emphasized that Voyager Digital had worked closely with regulators throughout its operations. Ehrlich asserted that the company had maintained a collaborative relationship with the relevant authorities, implying that the allegations were a surprise given their previous interactions.
Nevertheless, CFTC commissioners are evaluating the staff’s recommendation and will decide whether to proceed with enforcement action. If approved, this action could mark a significant development in holding individuals accountable for violations within the cryptocurrency sector.
According to recent reports, the outcome of the CFTC’s decision will have broader implications for the regulatory landscape within the cryptocurrency industry.
The investigation into Ehrlich’s alleged misrepresentation of customer asset safety highlights the growing scrutiny surrounding compliance and asset protection in the digital asset space.
If enforcement action is taken, it could serve as a precedent for future accountability and reinforce the need for stronger oversight in the crypto lending sector.
Allegations Of DeceptionVoyager Digital filed for bankruptcy in July of 2022, citing financial difficulties exacerbated by the decline in cryptocurrency prices. The collapse of the Terra Luna stablecoin further added to the challenges, leading to a cryptocurrency market downturn.
Prior to filing for bankruptcy, Voyager faced criticism for preventing customers from withdrawing their crypto assets. These actions raised concerns about the company’s financial stability and the safety of customer funds.
Interestingly, in March 2023, the Reddit community scrutinized Stephen Ehrlich, accusing him of still receiving a salary as CEO despite the company’s bankruptcy filing.
Users alleged that Ehrlich was earning a $480,000 salary, leading to outrage and labeling him as a “scammer.” These allegations added to the negative sentiment surrounding Voyager Digital.
Industry participants will closely watch the outcome of the CFTC’s decision and may shape future regulatory measures within the digital asset space.
Featured image from Shutterstock, chart from TradingView.com
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