A federal judge has given approval to the $1.65 billion settlement reached between crypto lending firm Voyager Digital and the United States Federal Trade Commission (FTC). The settlement, initially disclosed in October, received judicial confirmation in a filing on November 28 in the U.S. District Court for the Southern District of New York. The approved order mandates Voyager and its affiliates to pay the stipulated $1.65 billion in monetary relief to the FTC. The agreement also includes a permanent restraint and injunction, prohibiting Voyager from marketing or providing products and services related to digital assets.
Judge Gregory Woods, overseeing the case, specified that the order's implementation would generally not impact ongoing proceedings in bankruptcy court. Voyager had filed for Chapter 11 protection in July 2022, revealing liabilities ranging from $1 billion to $10 billion. A court-approved plan in May allowed Voyager users to initially receive 35.72% of their claims from the lending firm.
Under the terms of the settlement, entities connected to Voyager are obliged to cooperate with FTC officials, providing testimony during hearings, trials, and discovery processes. Additionally, Voyager is required to report on its compliance with the proceedings after one year, subject to monitoring by the commission.
It's important to note that this settlement does not address the outstanding case involving former Voyager CEO Stephen Ehrlich with the Commodity Futures Trading Commission (CFTC). In parallel lawsuits filed in October, both the CFTC and the FTC accused Ehrlich of making misleading statements regarding the use and safety of customer funds. Ehrlich, at the time of the allegations, asserted that Voyager's team had consistently communicated and collaborated closely with regulators.
The broader context of regulatory actions against crypto lending firms includes a previous case in July where the FTC ordered Celsius, another crypto lending firm, to pay $4.7 billion in fees. The allegations against Celsius co-founders included the misappropriation of user assets and misleading investors about the platform's services. The former CEO of Celsius, Alex Mashinsky, was arrested by U.S. officials and is currently free on bail until his trial, scheduled for September 2024.
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