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

Other Questions People Ask

What does the $1.65B settlement between Voyager Digital and FTC entail?

The $1.65 billion settlement requires Voyager Digital and its affiliates to provide financial relief to the FTC, as ordered by Judge Gregory Woods. This settlement follows a previous agreement revealed in October, which mandates that Voyager is completely restrained from marketing or offering services related to digital assets. Additionally, Voyager must cooperate with FTC officials, including providing testimony at hearings and trials.

How will the settlement affect Voyager Digital's bankruptcy proceedings?

According to Judge Woods, the $1.65 billion settlement will largely not impact the ongoing bankruptcy procedures in which Voyager declared Chapter 11 in July 2022. The court had previously approved a strategy allowing users to recover 35.72% of their claims against the company. This means that while the settlement is significant, it does not alter the existing bankruptcy framework that Voyager is navigating.

What are the implications for Voyager Digital's former CEO following the settlement?

The settlement comes in the wake of parallel suits filed by the FTC and the U.S. Commodity Futures Trading Commission against former CEO Stephen Ehrlich, who is accused of making deceptive statements about user funds. As part of the settlement, Voyager must comply with FTC oversight, which may include further scrutiny of Ehrlich's actions during his tenure. This could lead to additional legal challenges for him as the case unfolds.

What steps must Voyager Digital take after the settlement is approved?

Following the approval of the $1.65 billion settlement, Voyager Digital is required to work closely with FTC officials and report on its compliance after one year. This includes providing testimony at hearings and cooperating with investigations related to its operations. The ongoing monitoring by the FTC will ensure that Voyager adheres to the terms set forth in the settlement.

How does this settlement compare to other recent actions against crypto companies?

The $1.65 billion settlement with Voyager Digital is part of a broader trend where U.S. enforcement agencies are intensifying their scrutiny of crypto-related activities. For instance, earlier this year, the FTC ordered Celsius to pay $4.7 billion for similar violations involving user assets. These actions reflect a growing commitment by regulators to hold crypto companies accountable for misleading practices and protect consumers in the digital asset space.