US watchdogs order Voyager Digital to stop making misleading insurance claims News ▸ US ▸ Regulation
US watchdogs order Voyager Digital to stop making misleading insurance claims
The U.S. FED and FDIC ordered Voyager Digital to desist from making public claims that its assets are insured by the FDIC.
2 min read
Updated: Jul. 29, 2022 at 1:48 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The U.S. Federal Reserve (FED) and Federal Deposit Insurance Corp (FDIC) have ordered Voyager Digital to desist from making false and misleading claims about its insurance status to customers.
In a joint letter sent to the crypto firm on July 28, the regulators said misleading information by Voyager Digital about its funds being covered by FDIC insurance may have influenced customers into investing in them.
A Voyager Twitter post from November 12, 2020, showed it made an announcement stating that USD held with Voyager is FDIC insured up to $250,000.
Have you heard? USD held with Voyager is FDIC insured up to $250K. Our customers' security is our top priority. Start growing your crypto portfolio today.
— Voyager (@investvoyager) November 12, 2020
The regulators said:
“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.”
According to the letter, Voyager has a deposit account with Metropolitan Commercial Bank, which is insured, but had no insurance license from the FDIC to offer its customers.
Voyager has been mandated to remove all misleading statements from all relevant touchpoints within two business days. However, they can engage the regulators for further clarifications if they possess any legal proof of FDIC deposit insurance.
Voyager seeking a way out
The cease and desist order from the regulators is the latest in a string of unfortunate events besieging Voyager.
The 3AC collapse caused Voyager to halt customer withdrawals abruptly. A few days later, it filed for Chapter 11 bankruptcy. Voyager is currently seeking intervention from investors to settle its creditors.
Sam Bankman-Fried’s FTX exchange offered to buy all of Voyager’s assets and refund customers following the trouble. However, Voyager rebuffed the offer and said it was a “low-ball bid dressed up as a white knight rescue.”
Voyager backed off the FTX deal and said it is working on a restructuring process to return maximum value to its customers and stakeholders.
In a July 11 update, Voyager started a voluntary restructuring process that will return funds to customers in crypto and common equity. It disclosed that its crypto asset holding amount to approximately $1.3 billion, plus a $650 million debt owed by collapsed Three Arrows Capital (3AC).
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Author 
Christian Nwobodo
Christian is a crypto-curious nerd who loves to investigate how protocols work under the hood. Christian is interested in DeFi protocol research, token economics, and on-chain analytics.
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In this article
Voyager
Voyager Digital is a bankrupt cryptocurrency exchange company in the United States that was founded in 2018.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Three Arrows Capital
Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, collapsed due to poor risk management, recklessness in dealing with business partners and a significant portion of greed.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.
