FDIC launches investigation into bankrupt Voyager Digital

According to the agency, the cryptocurrency broker provided customers with false information by claiming that their assets were protected by its program

09.07.2022 - 09:00

428

2 min

What’s new? The US Federal Deposit Insurance Corporation (FDIC) has begun investigating the marketing strategy of the bankrupt crypto broker Voyager Digital. The company has previously reported that any funds deposited are covered by FDIC insurance, thanks to its partnership with Metropolitan Commercial Bank, which, unlike Voyager, has FDIC insurance. Thus, deposit insurance does not protect customers against default, Voyager’s bankruptcy, freezing of funds, or loss in value of products, Bloomberg reports.

Bloomberg’s material

What else does the outlet report? Wording published on Voyager’s website in 2019 said the insurance protection would come into effect in the “rare event your USD funds are compromised due to the company or our banking partner’s failure.” The statement was later changed to read as follows:

“In the rare event your USD funds are compromised, you are guaranteed a full reimbursement (up to $250 000), so the cash you hold with Voyager is protected.”

Meanwhile, Metropolitan Commercial Bank recently issued a statement informing Voyager customers that FDIC insurance coverage is only available in the event of bankruptcy of the bank itself, not in case of Voyager’s bankruptcy.

Statement by Metropolitan Commercial Bank

Voyager situation. On July 1, the platform suspended all operations, including withdrawals. It had about $685 million in cryptocurrency in its accounts, while the volume of loans issued exceeded $1,1 billion. Half of that amount was allocated to the bankrupt hedge fund Three Arrows Capital.

Author: