US Judge Approves $1.65B Settlement between Voyager Digital and FTC
Coinspeaker
US Judge Approves $1.65B Settlement between Voyager Digital and FTC
On Tuesday, November 28, the federal judge approved an order requiring crypto lending firm Voyager Digital and its affiliates to pay $1.65 billion in monetary relief to the United States Federal Trade Commission (FTC).
In a November 28 filing in US District Court for the Southern District of New York, Judge Gregory Woods ordered Voyager to pay $1.65 billion following a settlement between the lending firm and the FTC announced in October.
As part of the agreement, Voyager will be “permanently restrained and enjoined” from marketing or providing products or services related to digital assets.
Judge Woods stated that the recently approved order is unlikely to significantly impact proceedings in the bankruptcy court. Voyager sought Chapter 11 protection in July 2022, revealing liabilities ranging from $1 billion to $10 billion. In May, the court greenlit a plan enabling Voyager users to receive an initial 35.72% of their claims from the lending firm.
As part of the settlement, entities linked to Voyager need to collaborate with FTC officials, participating in hearings, trials, and discovery processes. Voyager must also provide compliance reports after a year, subject to monitoring by the commission.
In October, both the US Commodity Futures Trading Commission (CFTC) and the FTC filed simultaneous lawsuits against former Voyager CEO Stephen Ehrlich, alleging misleading statements about the use and safety of customer funds. Ehrlich, at the time, also contended that Voyager’s team had consistently communicated and collaborated closely with regulators, largely refuting the allegations.
Furthermore, in a separate case in July, the FTC ordered crypto lending company Celsius to pay $4.7 billion in fees, accusing the co-founders of misappropriating user assets and providing misleading information to investors about the platform’s services. Former Celsius CEO Alex Mashinsky, arrested by US officials, remains free on bail until his trial, scheduled to commence in September 2024.
DCG Ends $620 Million Lawsuit with Genesis
In another development, Digital Currency Group (DCG) has reached a new repayment agreement with its bankrupt subsidiary, Genesis Global Holdco LLC, as part of a resolution to a lawsuit seeking approximately $620 million from DCG.
During a Tuesday hearing, Genesis lawyer Sean O’Neal stated that the deal is expected to provide the bankrupt cryptocurrency lender with around $200 million in value over the next few weeks. The agreement stipulates that DCG must fulfill outstanding payments by April 2024, and in the event of a default, Genesis retains the right to pursue the collection of any unpaid amount, according to court documents.
The proposed agreement aims to settle a lawsuit initiated by Genesis in September, seeking to recover outstanding loans from its parent company. Despite DCG making payments to Genesis since the lawsuit’s filing, court documents indicate that, as of Nov. 28, DCG still owes its subsidiary $324.5 million.
Genesis has expressed that the agreement will prevent lengthy and costly litigation with its parent company, ensuring that the bankrupt crypto lender receives partial repayment of its owed amount. However, O’Neal clarified that the deal does not address other disputes between Genesis and DCG related to the resolution of Genesis’s bankruptcy.
US Judge Approves $1.65B Settlement between Voyager Digital and FTC