The US Federal Trade Commission said that it has opened an inquiry into cryptocurrency lending startup Voyager Digital parallel to the company’s bankruptcy proceedings.
The Federal Trade Commission (FTC) said on February 22 that it was looking into Voyager and its staff “for their fraudulent and unfair promotion of cryptocurrencies to the public.” Bankruptcy judge Michael Wiles made the announcement after initially authorizing a deal in which the debtors of Voyager would sell the company’s assets to Binance.US for more than $1 billion.
According to the filing, which was the commission’s opposition to the debtors’ plan the FTC contended that some of the parties participating in the crypto lender’s bankruptcy proceedings should not be immune from certain financial claims, including debts for false representation.
“By not excluding, inter alia, false pretenses, and false representations, the release can be read to interfere with causes of action by a governmental unit like the FTC. This is impermissible […] the FTC respectfully requests the Court deny confirmation of the Debtors’ Proposed Plan.”
Voyager Digital bankruptcy
Prior to comparable applications from Celsius Network, FTX, and BlockFi in July 2022, Voyager filed for Chapter 11 bankruptcy in the United State. Binance.US would be included in one of the ideas for restructuring the company. The US Securities and Exchange Commission has objected to the US acquiring the assets of Voyager, claiming a lack of “essential information.”
FTX and Celsius are both going through bankruptcy processes, and their respective CEOs, Sam Bankman-Fried and Alex Mashinsky are being investigated by U.S. authorities for purported actions they allegedly took before the company filed for Chapter 11.
More than 85% of users were anticipated to recoup almost 70% of their payments under Celsius’ suggested restructuring plan.