Lender Cypto Voyager Digital has been instructed to remove “false and misleading” claims that its users’ deposit accounts are FDIC insured.
In a joint letter written on July 28 by Seth Rosebrockfrom and Jason Gonzalez, assistant general counsel for the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) at Voyager Digital, the authors said that the statements “probably misled and relied upon” customers who placed funds with Voyager who now no longer have access.
“These representations are false and misleading and, based on the information available to us to date, it appears that the statements were likely misleading and relied upon by customers who placed their funds with Voyager and did not not have immediate access to their funds.”
The Fed and FDIC allege that Voyager “made various representations online, including its website, mobile app, and social media accounts,” suggesting it was:
“(1) Travel itself is FDIC insured; (2) clients who invested with the Voyager cryptocurrency platform would receive FDIC insurance coverage for all funds provided to, held by, on, or with Voyager; and (3) the FDIC would insure customers against the failure of Voyager itself.
The letter further required that Voyager provide written confirmation of its compliance with the regulator’s requests within two business days and provide a complete list of all statements regarding any reference to FDIC insurance within 10 days.
He also warned that even if Voyager met the requirements set out in the cease and desist letter, that would not preclude the regulator from taking further action if deemed appropriate.
Voyager’s website currently says it worked with the FDIC to update and clarify the language surrounding FDIC insurance on its website in early 2021 and early 2022.
Currently, the language surrounding FDIC insurance states that the USD in the Voyager cash account is held at the Metropolitan Commercial Bank (MCB) and is FDIC insured.
“FDIC insurance does not protect against Voyager default, but to be clear: Voyager does not hold customers’ money, that money is held by the MCB.”
Cointelegraph has contacted Voyager for comment but did not receive an immediate response at the time of publication.
Only July 6, Voyager Digital filed for bankruptcyciting debts of up to $10 billion to around 100,000 creditors amid market turmoil initially caused by the collapse of the Terra ecosystem and then got worse when Singaporean hedge fund Three Arrows Capital (3AC) defaulted on a $670 million loan on