In another sign of dark clouds gathering over troubled crypto platform Voyager Digital, the US Federal Deposit Insurance Corporation (FDIC) and the board of the Federal Reserve (Fed), America’s central bank, have issued a joint letter in which they demand that the company cease and desist from making what they describe as “false and misleading statements regarding its FDIC deposit insurance status” and take action to correct such prior statements.
The two institutions said in a statement that Voyager and certain officers and employees of the company have made various statements online in which they claimed or suggested that the business is FDIC-insured, its customers would obtain the FDIC insurance coverage for all funds provided to and held by Voyager, and also that the FDIC would insure them against Voyager’s failure.
The two entities said that,
“These representations are false and misleading. 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.”
Some, however, suggested that this action may be too little, too late. “Hindsight isn’t investor protection,” argued Maya Zehavi, founder and CEO at Stealthy New Venture and Founding Board Member of the Israeli Blockchain Industry Forum, who asked:
“Isn’t the whole idea of regulators to point out “misleading” marketing fluff to investors before companies go under?”
The latest development comes shortly after Voyager Digital dismissed a joint offer by crypto exchange FTX and its parent company Alameda, calling it a “low-ball bid” that could disrupt the company’s bankruptcy process.
“The AlamedaFTX proposal is nothing more than a liquidation of cryptocurrency on a basis that advantages AlamedaFTX. It’s a low-ball bid dressed up as a white knight rescue,” Voyager’s lawyers said in response to the bid in a recently submitted court filing.
Earlier this month, Voyager Digital filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code as it seeks to implement its reorganization plan and “maximize value for all stakeholders.”