The Federal Reserve Board and Federal Deposit Insurance Corp. Thursday issued a joint letter ordering Jersey City-based Voyager Digital to cease and desist from making “false and misleading statements concerning the company’s FDIC deposit insurance status.”
The agencies accuse Voyager, and certain officers and employees, of making false representations online stating or suggesting that the company is FDIC-insured, that customers investing on the Voyager platform would receive FDIC insurance coverage, and that the FDIC would insure customers against the failure of Voyager itself.
“These representations are false and misleading,” the regulators wrote in a joint statement. “Based on the information gathered to date, it appears that these representations likely misled and were relied upon by customers who placed their funds with Voyager and do not have immediate access to their funds.”
The order is the latest in a series of struggles for Voyager and the crypto industry as a whole. The firm filed for Chapter 11 bankruptcy protection last month.
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In a joint letter to Voyager, the regulators demanded that the company immediately remove any and all statements or suggestions about false FDIC protection and insurance.
“Within two business days from the receipt of this letter, Voyager shall provide written confirmation to the FDIC and Board of Governors that it has fully complied with the requests set forth above,” Seth Rosebrock, assistant general counsel, Enforcement, FDIC, and Jason Gonzalez, assistant general counsel, Enforcement, board of governors of the Federal Reserve System, wrote in that letter.
“Such confirmation shall detail the efforts that Voyager took to comply with this letter, including all steps undertaken by Voyager to identify and locate all such misrepresentations, and the scope of Voyager’s removal of the misrepresentations from its website, mobile app, Twitter accounts, and any other marketing, advertising, and consumer-facing materials and communications,” the letter continued.
The regulators added that further action is still possible.
“Your prompt response to the above does not preclude us from taking any further action, as appropriate, with respect to the foregoing or any other violations of law or regulation, or unsafe or unsound banking practice,” they said.
The regulators also point out that while Voyager maintains a deposit account at Metropolitan Commercial Bank, which is supervised by the Board, Voyager is not itself insured by the FDIC.
“So, customers who invested through its cryptocurrency platform would not receive insurance coverage in the event of Voyager’s failure,” said the regulators.
Voyager did not respond to a request for comment by publication of this story.
