Judge signs off on $1.65B settlement between Voyager Digital and FTC
A federal judge has approved an order requiring crypto lending company Voyager Digital and its affiliates to pay $1.65 billion in financial relief to the United States Federal Trade Commission (FTC). In a Nov. 28 filing in U.S. District Court for the Southern District of New York, Judge Gregory Woods ordered Voyager to pay $1.65 billion following a settlement in between the lending firm and FTC revealed in October. As part of the agreement, Voyager will be “completely restrained and enjoined” from marketing or offering services or products associated with digital assets.Source: PACERAccording to Judge Woods, the order will mostly not effect procedures in personal bankruptcy court, where Voyager declared Chapter 11 security in July 2022 and disclosed liabilities ranging from $1 billion to $10 billion. In May, the court approved a strategy allowing Voyager users to get 35.72% of their claims at the lending company initially.Under the settlement, celebrations related to Voyager needs to work together with FTC officials, consisting of statement at hearings, trials, and discovery. After a year, Voyager should also report on its compliance with the procedures, subject to keeping an eye on by the commission.Related: FTC boosts investigative procedures to deal with AI-related lawbreakingIn October, the U.S. Commodity Futures Trading Commission and FTC filed parallel suits versus previous Voyager CEO Stephen Ehrlich, declaring he made deceptive statements concerning the use and security of consumer funds. Ehrlich declared at the time that Voyagers team “regularly communicated and worked closely” with regulators, mainly denying the allegations.In July, the FTC ordered crypto financing company Celsius to pay $4.7 billion in charges, declaring the companys co-founders abused user assets and deceived financiers about the platforms services. U.S. officials arrested previous Celsius CEO Alex Mashinsky, and he remains complimentary on bail up until his trial, set up to begin in September 2024. Magazine: US enforcement companies are showing up the heat on crypto-related criminal activity
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Other Questions People Ask
What does the Judge's approval of the $1.65B settlement between Voyager Digital and FTC mean for the company?
The Judge's approval signifies that Voyager Digital is required to pay $1.65 billion in financial relief to the FTC, which will impact its operations significantly. As part of the settlement, Voyager is completely restrained from marketing or offering any services related to digital assets. This decision comes amidst Voyager's ongoing Chapter 11 bankruptcy proceedings, where it has disclosed liabilities ranging from $1 billion to $10 billion.
How will the $1.65B settlement between Voyager Digital and FTC affect Voyager users?
The settlement mandates that Voyager must cooperate with FTC officials, which includes providing testimony at hearings and trials. Users of Voyager will initially receive 35.72% of their claims as part of a previously approved strategy by the court. However, the full implications of the settlement on user funds and future claims will depend on Voyager's compliance with the FTC's monitoring requirements.
What are the implications of the Judge's ruling on Voyager Digital's bankruptcy proceedings?
Judge Gregory Woods' ruling on the $1.65 billion settlement does not significantly alter the ongoing personal bankruptcy procedures for Voyager Digital. The company filed for Chapter 11 protection in July 2022, and this settlement is separate from those proceedings. However, it adds another layer of complexity as Voyager navigates its financial obligations while complying with FTC oversight.
What actions must Voyager Digital take following the $1.65B settlement with the FTC?
Following the settlement, Voyager Digital is required to work closely with FTC officials, which includes providing testimony and documentation as needed. Additionally, after one year, Voyager must report on its compliance with the settlement terms, which will be subject to monitoring by the FTC. This ongoing oversight is crucial for ensuring that Voyager adheres to the restrictions placed upon it regarding digital asset services.
What led to the $1.65B settlement between Voyager Digital and the FTC?
The settlement arose from allegations against former Voyager CEO Stephen Ehrlich, who was accused of making misleading statements about the use and security of customer funds. The FTC and U.S. Commodity Futures Trading Commission filed parallel suits against him, highlighting concerns about consumer protection in the crypto lending space. The settlement reflects a broader trend of regulatory scrutiny in the cryptocurrency industry, particularly following similar actions against other companies like Celsius.