-- Investigators at a key US regulator have concluded that the co-founder of Voyager Digital Ltd. broke derivatives regulations before the failed crypto lender plunged into bankruptcy last year, according to people familiar with the matter.Staff in the Commodity Futures Trading Commission’s enforcement division recommended internally that the agency accuse Stephen Ehrlich of breaking its rules by misleading customers about the safety of their assets following a probe into Voyager’s conduct.
Ehrlich, who was also chief executive officer when Voyager filed for bankruptcy in July 2022, has not been formally accused of any wrongdoing. In an emailed statement, he said he was “angered and perplexed” by the government’s anticipated civil claims and called them unfounded. Separately, the Federal Trade Commission, which has authority over consumer protection, said in February that it opened an investigation into the company and its employees, directors, and officers over “deceptive and unfair marketing of cryptocurrency to the public.”US regulators last year demanded Voyager remove any statements indicating that customers’ dollar deposits were covered by federal deposit insurance. They said those claims were false.
The tumultuous year exposed the extent of interconnectedness among the market’s major players. Before Voyager’s downfall, one corner of Bankman-Fried’s empire borrowed from and lent money to Voyager, and FTX’s US business even sought to buy it in bankruptcy before FTX itself collapsed just months later.
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