Bankrupt cryptocurrency lender Voyager Digital is being investigated by the U.S. Federal Trade Commission (FTC) over alleged deceptive marketing practices of cryptocurrency to the public.
In a legal filing on Wednesday, the FTC stated that it does not want the proposed plan to wind up the affairs of Voyager to interfere with its investigation into the case.
The FTC has launched an investigation into certain acts and practices of Voyager Digital, including its employees, directors, and officers, for their alleged deceptive and unfair marketing of cryptocurrency to the public, the filing said.
The probe is part of the agency’s mission to protect consumers from unfair business practices or competition.
In January, Voyager Digital filed for bankruptcy and proposed a plan that included the sale of company assets to crypto exchange Binance US.
However, the plan would also have released the company and its employees from financial claims, including those related to wrongdoing, according to the FTC.
The release can be read to interfere with causes of action by a governmental unit like the FTC, inhibiting the agency’s ability to prosecute its claims, the filing argued.
The FTC warned consumers last June that they had lost over $1 billion to crypto scams and bogus investment schemes.
As the investigation continues, the FTC is reminding consumers to be vigilant and cautious about cryptocurrency investments, warning that not all of them are legitimate.
This case highlights the importance of transparency and honesty in the cryptocurrency industry and the need for regulation to protect consumers from fraud and deceptive practices.
