Stephen Ehrlich, the former CEO of Voyager Digital, has agreed to pay $2.8 million to settle charges brought by the Federal Trade Commission (FTC). The charges allege that Ehrlich and his company misled consumers regarding the safety of their deposits. As part of the settlement, Ehrlich will also be banned from marketing or selling retail products or services related to cryptocurrency transactions.
The FTC's complaint from October 2023 accused Voyager and Ehrlich of falsely claiming that consumer deposits were FDIC-insured and "as safe with us as at a bank." In reality, most funds were not insured, leading to over $1 billion in losses for customers when Voyager failed.
Additionally, the complaint states that after the company's failure, consumers were unable to access their assets for more than a month. These assets included life savings and funds earmarked for college tuition and home down payments.
Previously, a settlement was reached with Voyager Digital, LLC, and its affiliated companies on November 23, 2023. The current proposed settlement requires Stephen Ehrlich and his wife Francine Ehrlich to pay $2.8 million. It also prohibits Stephen Ehrlich from making misrepresentations about any product or service or disclosing nonpublic personal information without consent.
The FTC approved the stipulated final order with a unanimous vote of 3-0. The proposed order was filed in the U.S. District Court for the Southern District of New York and will become law once signed by a District Court Judge.
Mark Glassman, Quinn Martin, and Elizabeth Arens from the FTC’s Bureau of Consumer Protection are handling this case.
The Federal Trade Commission aims to promote competition while protecting consumers through education. They advise against sending money under pressure or believing in promises of prizes without verification. More information can be found at consumer.ftc.gov or ReportFraud.ftc.gov.
