The Voyager Digital saga: Alleged malfeasance and the shadow of the CFTC

The cryptocurrency industry is always, always in the spotlight. Stephen Ehrlich, co-founder of the now-bankrupt Voyager Digital, is in the crosshairs of the Commodity Futures Trading Commission (CFTC) following possible malfeasance that led to the platform’s collapse.

CFTC investigates Stephen Ehrlich’s alleged wrongdoing

As revealed by Bloomberg, the Commodity Futures Trading Commission (CFTC) is investigating Stephen Ehrlich, co-founder of Voyager Digital, following allegations that he had misled his customers regarding the security of their assets. These allegations may have contributed to the fall of Voyager Digital.

Faced with these serious allegations, Ehrlich firmly maintains his innocence. In a interview with Bloomberg, he expressed surprise at the civil lawsuits mentioned, considering them unfounded. He affirms that he has constantly worked closely with regulators throughout the existence of Voyager Digital.

Currently, the commissioners of the CFTC review their team’s recommendations and decide whether to implement sanctions.

Background to Voyager collapse Digital

July 2022, Voyager Digital declared bankruptcy, citing the challenges posed by falling cryptocurrency prices and the collapse of Terra Luna.

The crypto exchange had already suffered criticism for blocking customer withdrawals, creating a climate of uncertainty as to the security of users’ funds.

The situation took a turn for the worse in March 2023, when a rumor about Reddit claimed that Ehrlich, despite the bankruptcy, was still receiving a CEO salary of $480,000.. This revelation added fuel to the fire, and many called him a “crook”, accentuating the mistrust towards Voyager Digital.

The crypto world has its eyes riveted on the upcoming decision of the CFTC hoping that it will shed light on the grey areas surrounding Voyager’s bankruptcy. Meanwhile, many customers remained in limbo, their funds are still blocked on the exchange.

The attempt to partially return the funds represented a tense period for the customers of Voyager Digital, especially during the 30-day withdrawal period from June 23 to July 22.

During this period, customers were able to recover almost $490 million, or around 80% of available funds. However, with only $630 million available to settle claims amounting to $1.8 billion, the road to full resolution remains rocky.