The commission opposed Voyager’s proposed restructuring plan, arguing that certain parties involved should not be exempt from specific financial claims in the future.
The US Federal Trade Commission announced that it has initiated an investigation into cryptocurrency lending company Voyager Digital while the firm is undergoing bankruptcy proceedings.
On the 22nd of February 2023, the FTC submitted a filing in the US Bankruptcy Court for the Southern District of New York, stating that it is investigating Voyager and its staff for their purportedly deceitful and unjust marketing of cryptocurrency to the public. This news came after Bankruptcy Judge Michael Wiles initially endorsed a plan in which Voyager’s creditors would sell the company’s assets to Binance.US for over USD 1 billion.
As per the FTC’s objection filing to the debtors’ plan, the commission contended that specific parties involved in Voyager’s bankruptcy proceedings must not be exempted from specific financial claims, which includes debts relating to “false representation” and “false pretenses”.
The FTC argued that if false pretenses and false representations are not excluded from the release, it may hinder causes of action by the government entities such as the FTC, which is not allowed. Therefore, the commission has requested the court to reject the confirmation of the Debtors’ Proposed Plan.
In July 2022, Voyager submitted a Chapter 11 bankruptcy filing in the United States, preceding similar filings from Celsius Network, FTX, and BlockFi. One of the suggested plans for the company’s restructuring was for Binance.US to purchase Voyager’s assets. However, the U.S. Securities and Exchange Commission raised concerns about the proposal, stating a lack of “required information.”
The bankruptcy proceedings for Celsius and FTX are currently underway, and their CEO’s, Alex Mashinsky and Sam Bankman-Fried, are facing investigations from US authorities over their purported actions before the firms filed for Chapter 11. As part of Celsius’ proposed restructuring plan, over 85% of users were anticipated to regain approximately 70% of their funds.