US regulators weigh penalizing bankrupt crypto lender Voyager’s ex-CEO, Bloomberg reports

Oct 6 (Reuters) – Investigators at the U.S. Commodity Futures Trading Commission’s enforcement division have concluded that the co-founder of Voyager Digital broke derivatives regulations before the failed crypto lender plunged into bankruptcy last year, Bloomberg News reported on Friday.

The regulator intends to accuse Stephen Ehrlich of breaking its rules by misleading customers about the safety of their assets following a probe into Voyager’s conduct, the report added, citing people familiar with the matter.

“Having spent nearly my entire career working in regulated markets, including more than 10 years at public companies, I have never had a single blemish on my record,” Ehrlich said in a statement, adding that he was being used as a “scapegoat for the bad actions of others at different companies.”

Voyager filed for bankruptcy in July last year, becoming a casualty of a dramatic fall in prices that had shaken the cryptocurrency sector.

Voyager had lost significant value during an industry-wide cryptocurrency winter caused by the collapse of the Terra Luna stablecoin in May 2022 and stopped customers from withdrawing their crypto assets shortly before its bankruptcy filing.

“Plainly said, we were all scammed together,” Ehrlich said, referring to “actions of others in the crypto industry.” He also touted Voyager’s team for building the “most ethical” business.

“I look forward to being vindicated in court,” he added.

The Bloomberg report said “CFTC commissioners are now voting on whether to approve an enforcement action against him (Ehrlich) within days.”

The CFTC did not immediately respond to a Reuters request for comment.

Our Standards: The Thomson Reuters Trust Principles.