The embattled crypto firm must remove all claims that it and its customers are FDIC insured.
U.S. banking regulators from the Federal Reserve and Federal Deposit Insurance Corporation issued a cease and desist order
to embattled crypto firm Voyager Digital on Thursday. The agencies
accuse Voyager of making "false and misleading" claims in telling
customers their funds were insured by the government.
On
July 8, the FDIC announced a probe into Voyager's claims of being FDIC
insured through the firm's partnership with Metropolitan Commercial
Bank.
"MCB
is a depository institution whose deposits are insured by the FDIC. The
Board of Governors is the primary federal regulator of MCB," regulators
said. In short, MCB being FDIC insured does not mean Voyager as a
company is also FDIC insured.
Voyager filed for bankruptcy on July 5 after it was revealed the firm had a $661 million exposure to failed crypto hedge fund 3AC.
It is now accused of claiming on its website, app, and social media, of being FDIC-insured.
The
regulators' order demands that Voyager immediately remove any and all
statements, representations, or references that suggest that the FDIC
insures Voyager, that customers would receive FDIC insurance coverage,
or that the FDIC would insure customers against the failure of Voyager.
it appears as if Voyager has already taken steps toward complying.
In
the original December 2019 blog post titled, "USD held with Voyager is
now FDIC Insured," Voyager claimed that the FDIC insurance covers both
Voyager and its banking partner' in case of failure and that its mutual
customers are guaranteed a full reimbursement of up to $250,000.
In
a July 2022 update, “Is the USD in my account FDIC insured?” the
website now says USD in a customer’s Voyager cash account is held at MCB
and is FDIC insured there.
“That
means you are covered in the event of MCB’s failure, up to a maximum of
$250,000 per Voyager customer. FDIC insurance does not protect against
the failure of Voyager, but to be clear: Voyager does not hold customer
cash, that cash is held at MCB.”
Voyager has similarly updated the original blog post.
source link : https://decrypt.co/106206/fed-fdic-order-voyager-to-stop-false-and-misleading-claims-of-insured-deposits
