The. U.S. Commodity Futures Shopping and selling Commission introduced on Thursday that it is suing Stephen Ehrlich, the frail CEO of the now-bankrupt crypto buying and selling platform and custodian Voyager Digital. The CFTC accuses Ehrlich of fraud, registration failures, and dealing an unregistered commodity pool. On the identical time, the Federal Trade Commission (FTC) separately charged Ehrlich and Voyager with falsely claiming that consumer deposits had been insured by the Federal Deposit Insurance Company (FDIC).

The CFTC alleges that Ehrlich and Voyager falsely advertised the platform as a “protected haven” to bear high-yield returns to entice clients into buying and storing digital asset commodities on the platform.

“Voyager’s reckless transfers ended in its own death,” wrote the CFTC in a submitting with the U.S. District Court docket for the Southern District of Modern York.

The CFTC is attempting to uncover restitution, disgorgement, civil monetary penalties, everlasting buying and selling, and registration bans.

“Here’s another CFTC action attempting to uncover to retain responsible a major govt officer for his characteristic in the false operation of a digital asset platform,” talked about CFTC director of enforcement Ian McGinley in a assertion.

“Ehrlich and Voyager lied to Voyager clients,” he continued. “While representing they would tackle clients’ digital asset commodities safely and responsibly, in the abet of the scenes, they took shockingly reckless dangers with their clients’ sources, ensuing in Voyager’s financial extinguish and big customer losses. When their business started to collapse, they continued lying to their clients, concealing Voyager’s correct monetary health. Amplifying their fraud, Ehrlich and Voyager broke their belief with clients whereas appearing in capacities that required CFTC registration, which they failed to assemble.”

The CFTC alleges that from at the least February 2022 through July 2022, Voyager (beneath the route of Ehrlich) acted to defraud clients by misrepresenting the safety and monetary health of the platform. To generate the income needed to pay the promised high-yield returns, Ehrlich and Voyager pooled customer sources and transferred billions of bucks worth of these sources as loans to high-threat third parties, alongside with a digital sources hedge fund.