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Voyager Digital and FTC Reach a $1.65B Settlement

FTC and Voyager Digital shake hands on a billion-dollar settlement

A federal judge sanctioned a massive $1.65 billion settlement between the cryptocurrency lending firm Voyager Digital and the United States Federal Trade Commission (FTC). This ruling, decreed by Judge Gregory Woods of the U.S. District Court for the Southern District of New York, comes after the firm's notable agreement with the FTC, first announced in October. 

The settlement imposes a hefty financial obligation on Voyager, necessitating the firm to disburse $1.65 billion. This development is a critical juncture in the evolving landscape of digital asset regulation.

The agreement not only entails a significant monetary penalty but also includes stringent restrictions on Voyager. The firm is now permanently prohibited from marketing or offering any digital asset-related products or services.This ruling underscores the growing scrutiny and regulatory oversight in the cryptocurrency domain, reflecting the authorities' heightened focus on ensuring compliance and consumer protection in this sector.

Beyond the settlement: broader implications for crypto regulation

This judicial order, however, is set to have minimal interference with Voyager's ongoing bankruptcy proceedings. The firm, which sought Chapter 11 protection in July 2022 amidst liabilities estimated between $1 billion to $10 billion, had already obtained court approval for a plan enabling users to recover a portion of their claims. 

As per this plan, users are expected to receive about 35.72% of their claims initially, a decision that intertwines with the broader narrative of the firm's financial woes and its implications in the realm of crypto legislation.

Parallel to the Voyager case, former CEO Stephen Ehrlich faces ongoing legal challenges. The U.S. Commodity Futures Trading Commission and the FTC have filed lawsuits against Ehrlich, accusing him of making deceptive statements about the security and usage of customer funds. These allegations, which Ehrlich largely denies, add another layer to the complex tapestry of crypto legislation and enforcement. 

The FTC's previous actions, such as the $4.7 billion fee imposed on Celsius for similar transgressions, further illustrate the trend of heightened regulatory action in the cryptocurrency sector, signaling a new era of accountability and oversight in the industry.