Judge signs off on $1.65B settlement between Voyager Digital and FTC

Regulation

A federal judge has approved an order requiring crypto lending firm Voyager Digital and its affiliates to pay $1.65 billion in monetary 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 between the lending firm and the FTC announced in October. As part of the agreement, Voyager will be “permanently restrained and enjoined” from marketing or providing products or services related to digital assets.

Source: PACER

According to Judge Woods, the order will largely not impact proceedings in bankruptcy court, where Voyager filed for Chapter 11 protection in July 2022 and disclosed liabilities ranging from $1 billion to $10 billion. In May, the court approved a plan allowing Voyager users to receive 35.72% of their claims from the lending firm initially.

Under the settlement, parties associated with Voyager must cooperate with FTC officials, including testimony at hearings, trials and discovery. After a year, Voyager must also report on its compliance with the proceedings, subject to monitoring by the commission.

Related: FTC enhances investigative procedures to deal with AI-related lawbreaking

In October, the U.S. Commodity Futures Trading Commission and the FTC filed parallel lawsuits against former Voyager CEO Stephen Ehrlich, alleging he made misleading statements regarding the use and safety of customer funds. Ehrlich claimed at the time that Voyager’s team “consistently communicated and worked closely” with regulators, largely denying the allegations.

In July, the FTC ordered crypto lending firm Celsius to pay $4.7 billion in fees, alleging the company’s co-founders misappropriated user assets and misled investors about the platform’s services. U.S. officials arrested former Celsius CEO Alex Mashinsky, who remains free on bail until his trial, scheduled to begin in September 2024.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

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