Few US banking regulators gave Voyager an ultimatum to stop misrepresenting clients that the government protects funds. According to the different sources, the FDIC(Federal Deposit Insurance Corp) and Federal Reserve sent letters on Thursday with a notice that they have tried to mislead their customers by making false claims.
There was no response from the Company, and the spokesman did not answer immediately despite the request for comment. The company was declared bankrupt a few weeks ago, according to officials. Since then, Different employees and executives from Voyager have given different statements to the customers that all their funds are completely secured, and FDIC would insure if Voyager fails.
U.S. Regulators Order Crypto Financial Institution Voyager To Stop Misleading Customers
Whereas the company had simply deposited all the funds to the Metropolitan Commercial Bank, there is no documentation that the company platform has insurance from FDIC for protecting the user funds.
The FDIC’s regulators said, “Based on all the information we’ve gathered, it’s clear that the claims were false and that the business relied completely on the customers and their money.” Moreover, there is no immediate access to their funds”.
Regulators recently instructed firm management to erase all references to FDIC-insured funds. It’s not clear yet if they also want to get rid of any mentions of the FDIC or FED.
Also, they have given them the time of two working days to respond to the letter and 10 working days. To remove all the references, information, and documentation of FDIC-related information and documentation.
Also, they warned the Voyager that they might take some action if needed, without giving details about it.
After looking into it and figuring it out, New York Bank only insured one Voyager account.
Voyager is facing intervention from different Firms Like FTX and facing court hearings about bankruptcy. The letter sent by FDIC is too late to protect the customers who entrusted the Voyager.
Sam BankMan-Fried, the person behind FTX Exchange, had made an offer to the customers of Voyagart for early liquidity. But then, Voyager’s Lawyers have criticized this as they believe that FTX is trying to grab this opportunity to benefit FTX.
Meanwhile, the customers of Voyager have pleaded with the Judge who is doing court hearings for the Voyager Bankruptcy case. They have requested to check the budget and their spending reports on marketing, building platform, and promotional activities.
Voyager is one of the Crypto firms that has recently struggled due to crypto market dynamics. According to resources, they’ve filed for bankruptcy and have more than 100,000 creditors and $1 to $10 billion in assets and obligations. The crypto Industry is in turmoil. So, it’s always a good idea to be careful when putting money into these kinds of platforms.