The Federal Reserve and the Federal Deposit Insurance Corp. (FDIC) has issued a joint cease-and-desist order to Voyager Digital, a cryptocurrency company, demanding it stop claiming it is federally insured.
In the joint letter from the Fed and FDIC general counsel, the agencies said that the representations “likely misled and were relied upon” by customers who placed funds with Voyager who now no longer have access to it.
The Fed and FDIC allege that Voyager “made various representations online, including its website, mobile app and social media accounts” which suggested:
- Voyager is FDIC-insured.
- Customers who invested with the Voyager cryptocurrency platform would receive FDIC insurance coverage for all funds provided to, held by, on or with Voyager.
- The FDIC would insure customers against the failure of Voyager itself.
The letter also demanded Voyager provide written confirmation of its compliance with the regulator’s demands within two business days and provide a full listing of all statements regarding any reference to FDIC insurance within 10 days.
It warned that even if Voyager met the demands outlined in the cease-and-desist letter, it won’t preclude the regulator from taking further action if deemed appropriate.
The language appearing on the Voyager website, app and accounts stated that the FDIC insurance did not protect against the failure of Voyager, but that all cash was held by Metropolitan Commercial Bank, an FDIC-insured depository institution.
Voyager Digital filed for bankruptcy last month, citing debts of up to $10 billion to roughly 100,000 creditors.