Elain Brown Tech 07.29.2022 04:Jul AM EDT

FDIC, Federal Reserve Demand Crypto Lender Voyager to Remove Claims That Funds are Insured

Crypto lender Voyager Digital was called out by the FDIC and the Federal Reserve, marketing false claims that deposit insurance on the platform is insured.

On July 28, a joint letter was sent to Voyager Digital from Seth Rosebrockfrom & Jason Gonzalez, Assistant General Counsel at the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) about the misleading claims they have made across all of their platforms.

These claims and statements might have likely led customers astray, and customers who had their money invested with Voyager but no longer have access to it relied on the representations.

Crypto in Voyager Might Not Be Insured

Voyager took another hit from the Federal Deposit Insurance Corporation ("FDIC") and the Board of Governors of the Federal Reserve System ("Board of Governors") for making false and misleading claims about its deposit insurance status.

Due to this violation the FDIC requests that Voyager stop what it is doing and take immediate corrective action to remedy the false and misleading representations that have been made.

According to the FDIC, "Section 18(a)(4) of the Federal Deposit Insurance Act ("FDI Act"), 12 U.S.C. § 1828(a)(4), prohibits any person from representing or implying that an uninsured deposit is insured or from knowingly misrepresenting the extent and manner in which a deposit liability, obligation, certificate, or share is insured under the FDI Act."

As detailed by the FDIC and the Federal Reserves, the crypto lending company made claims in their website, social media accounts, and mobile app regarding the following:

First claim stated that Voyager itself is FDIC-insured.
Second, the company claimed that users would be eligible to claim FDIC insurance for all funds provided to, held by, on, or with the platform.
Third, the false claim that the FDIC would insure all of the users of the platform if Voyager failed.

The government agencies stated that based on their gathered information, it appears that these statements are incorrect and deceptive and that consumers entrusted Voyager with their money.

Last July 6, the crypto platform filed for bankruptcy and since then, users do not have access to their funds in the platform.

Voyager's Compliance To FDIC

The government agencies are demanding the crypto platform to immediately remove any and all statements, representations, or references that claim that it is insured by the FDIC.

It has been detailed that the crypto platform shall remove their affiliation with the FDIC on their mobile app, online outlets, on social media sites like Twitter, and on their website including the hyperlinks, pop-up, chatbots and all forms of marketing and advertising.

In addition, the Board of Governors and the FDIC demands that the crypto lending company is required to give written proof that it has fully complied with the requests outlined above within two (2) business days of the receipt of this letter.

The proof that the agencies are asking has shared that it should include a list of all the procedures that Voyager took to identify and locate all of these misrepresentations, as well as a description of the measures that Voyager did to comply with the requirements of this letter.

As reported by Cointelegraph, on its website, Voyager now indicates that the company has collaborated with the FDIC to revise and clarify the language concerning FDIC insurance that appears on the company's website in the early years of 2021 and 2022.

The report mentions, "Currently, the language surrounding FDIC insurance states that USD in Voyager cash account is held at Metropolitan Commercial Bank (MCB) and is FDIC insured."