Voyager Digital co-founder Stephen Ehrlich is reportedly under investigation by the U.S. Commodity Futures Trading Commission (CFTC) for alleged violations of derivatives regulations.

Bloomberg revealed that the Commodity Futures Trading Commission's enforcement staff investigated Ehrlich's behavior and concluded that he misled clients about the safety of his assets.

Voyager co-founder found to have violated derivatives regulations

According to Bloomberg, the CFTC’s investigation focuses on Stephen Ehrlich’s alleged violations of derivatives regulations, particularly those related to the safety of customer assets. Ehrlich allegedly misled customers about the safety of their assets, which may have led to the closure of Voyager Digital.

The investigation seeks to determine whether Ehrlich’s actions violated CFTC rules and regulations governing the cryptocurrency industry.

Notably, Ehrlich expressed confusion over the CFTC’s allegations. He told Bloomberg that he was surprised by the expected civil claims and called them without merit.

Ehrlich stressed that Voyager Digital has worked closely with regulators throughout its operations. Ehrlich claimed that the company has a cooperative relationship with the authorities, meaning that the allegations come as a surprise considering their previous interactions.

Nonetheless, CFTC commissioners are evaluating the staff’s recommendations and will decide whether to proceed with the enforcement action. If approved, the action could mark a significant step forward in holding individuals accountable for violations in the cryptocurrency industry.

According to recent reports, the outcome of the CFTC’s decision will have broader implications for the regulatory landscape of the cryptocurrency industry.

The investigation into Ehrlich’s alleged misrepresentation of the security of client assets highlights the growing scrutiny of compliance and asset protection in the digital asset space.

If enforcement action is taken, it could set a precedent for future accountability and reinforce the need for greater regulation of the cryptocurrency lending industry.

Allegations of deception

Voyager Digital filed for bankruptcy in July 2022, citing financial difficulties exacerbated by falling cryptocurrency prices. The collapse of the Terra Luna stablecoin further exacerbated the challenges, leading to a downturn in the cryptocurrency market.

Prior to filing for bankruptcy, Voyager was criticized for preventing customers from withdrawing 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 censored Stephen Ehrlich, accusing him of collecting his CEO salary despite the company filing for bankruptcy.

Voyager allegedly made payments to Ehrlich as of March 2023. Source: Reddit

Users claimed Ehrlich’s salary was $480,000, sparking outrage and labeling him a “fraud.” The allegations fueled negative sentiment toward Voyager Digital.

Industry participants will be closely watching the outcome of the CFTC’s decision and may shape future regulatory responses in the digital asset space. #监管  #Voyager