The former CEO of failed crypto firm Voyager Digital is being sanctioned in a settlement with the U.S. Commodity Futures Trading Commission (CFTC), which alleged that investors were misled about the condition of the firm.
The U.S. District Court for the Southern District of New York entered a consent order resolving an enforcement action brought by the CFTC against Stephen Ehrlich, the former CEO of now-bankrupt Voyager Digital Ltd., Voyager Digital Holdings Inc. and Voyager Digital LLC.
In 2023, the derivatives regulator filed a complaint charging Ehrlich with fraud and registration failures, alleging that between February and July 2022, he and Voyager falsely touted the firm’s platform as a “safe haven” to earn high returns, in an effort to induce customers to use the platform for buying and storing digital assets.
In its litigation, the CFTC originally sought restitution, disgorgement, civil penalties and permanent trading and registration bans.
Under the consent order, which resolved the charges without admitting or denying the allegations, Ehrlich agreed to pay US$750,000 in disgorgement to Voyager investors through the firm’s bankruptcy liquidation procedure. He was also banned from registration for three years.
In June, the U.S. Federal Trade Commission (FTC) — which also filed charges against Voyager and Ehrlich, alleging they falsely told investors their deposits were protected by deposit insurance — settled with Ehrlich. He agreed to pay US$2.8 million to resolve the FTC’s charges and accepted a ban on marketing crypto-related products.
In a previous settlement with Voyager, the FTC permanently banned the firm from handling consumers’ assets.
“Compensating victims and limiting a defendant’s ability to cause future harm are squarely within the CFTC’s core mission,” said Charles Marvine, acting chief of the CFTC enforcement division’s retail fraud and general enforcement task force, in a release.