
The Federal Trade Commission has determined that Voyager Digital's co-founder, Stephen Ehrlich, violated derivatives regulations before the company's bankruptcy last year, Bloomberg reported on Oct. 6 in a statement.
The enforcement division of the CFTC has made an internal recommendation to accuse Ehrlich of violating derivatives regulations by giving customers misleading information regarding the safety of their assets.
After the recommendations, the CFTC Commissioners are deliberating on whether a enforcement action should be taken against him soon.
Ehrlich said in an emailed statement to Bloomberg that the bankrupt lender cooperated with relevant authorities before its implosion. He added that the anticipated lawsuit 'angered and perplexed' him. He added: 'It is a privilege to be able to do what we have done in the past few years,' he said.
Bloomberg also reported that Voyager's bankruptcy administrator Paul Hage endorsed a settlement deal with the Federal Trade Commission. The FTC's allegations that Voyager had provided inaccurate information to its previous customers regarding the availability of Federal Deposit Insurance Corp. protection were met with apprehension by the FTC.
At its peak, Voyager was among the largest lenders in the cryptocurrency industry. Last year, the company and several others operating a similar business model failed in the wake of market downturn and several high-profile collapses.