Stephen Ehrlich—former CEO of defunct crypto lender Voyager Digital—was slapped with a lawsuit by the Commodities and Futures Trading Commission (CFTC) on Thursday for misleading the platform’s customers about the safety of their assets.

The complaint accuses the founder of both fraud and registration failures related to its operation of an “unregistered commodity pool”—a classification the CFTC believes applies to many cryptocurrencies, such as Bitcoin (BTC).

“Ehrlich and Voyager falsely touted the Voyager platform as a “safe haven” to earn high-yield returns to induce customers to purchase and store digital asset commodities,” wrote the CFTC in a statement on Thursday.

The agency now seeks permanent registration and trading bans on Ehrlich, alongside restitution, disgorgement, and civil monetary penalties. When Voyager filed for bankruptcy in July, it owed its U.S. customers and creditors $1.7 billion according to the CFTC.


In May, the judge overseeing Voyager's bankruptcy proceeding cleared the company to repay $1.3 billion to creditors.

In a parallel action on Thursday, the Federal Trade Commission (FTC) charged Ehrlich for similar misrepresentations, as well as for falsely claiming that customer accounts were FDIC insured.

Before its collapse last summer, Voyager promised customers yields as high as 12% on their assets and transferred them to “high-risk third parties.”

According to the CFTC, Voyager transferred $650 million in pooled customer assets to an unnamed hedge fund in early 2022 on an unsecured basis, therefore acting as a “commodity pool operator (CPO) without the required CFTC registration.”


“Ehrlich and Voyager… took shockingly reckless risks with their customers’ assets, leading to Voyager’s bankruptcy and huge customer losses,” said Director of Enforcement Ian McGinley in a statement.

The charges follow numerous other enforcement actions by U.S. regulators against competing crypto firms since last year, as blowups like Celsius, Voyager, and BlockFi resulted in billions of dollars lost for both institutional and retail investors.

Crypto exchanges like FTX and Binance.US once had plans to buy out Voyager, but both eventually fell through. The former exchange has since collapsed, and both are now berated with lawsuits from the CFTC and others for illegal commodities trading operations.

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