The U.S. Commodity Futures Trading Commission (CFTC) is considering taking legal action against Stephen Ehrlich, the former co-founder and CEO of Voyager Digital Ltd., a crypto lending platform that went bankrupt last year amid market turmoil.
Bloomberg Received an Emailed Statement
According to Bloomberg News, the CFTC’s enforcement staff has recommended that the agency accuse Ehrlich of violating derivatives rules by misleading customers about the safety of their assets. Several media outlets have sought comment from the CFTC, but the agency has yet to issue a response. In contrast, Ehrlich has communicated his stance on the matter through an email statement sent to Bloomberg.
The CFTC commissioners are expected to vote on whether to approve the enforcement action within the next few days. Ehrlich denied the allegations and said he was “angered and perplexed” by the government’s claims.
He said he worked closely with the regulators and followed the rules. Ehrlich stated that the allegations feel like those times when referees are constantly changing the rules of the game. He also said he would fight the charges in court and prove his innocence.
Voyager was one of the many crypto lending platforms that emerged in recent years, offering high interest rates to customers who deposited their digital assets. The platform claimed to have over 100,000 customers and more than $3 billion in assets under management at its peak.
However, Voyager filed for Chapter 11 bankruptcy protection in September 2022, after suffering heavy losses from the collapse of the Terra blockchain, which triggered a $40 billion market crash in May 2022. Many of Voyager’s customers lost their funds or faced delays in withdrawing them.
The CFTC has been cracking down on crypto lending platforms, alleging that they are offering unregistered securities or derivatives products. The agency has also sued BitMEX, a major crypto derivatives exchange, for operating illegally in the U.S. and violating anti-money laundering rules.
