NJ Slams Voyager Digital’s $5 Billion Unregistered Money Markets With Cease and Desist

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The New Jersey securities regulator today targeted Voyager Digital with a cease and desist order that prohibits the New Jersey-based crypto-asset broker from selling other unregistered securities in the form of accounts. paid cryptocurrency.

Voyager used its approximately 1,530,000 interest-bearing Voyager Earn program accounts to raise $5 billion globally as of March 1, 2020, the Cease and Desist says. About 52,800 accounts were based in New Jersey and held about $197 million in assets.

The problem, the regulator said, is that Voyager Earn Program accounts are not registered as securities in New Jersey or with any other securities regulator, nor are they exempt from liability. ‘registration.

Until now, every Voyager customer received a Voyager Earn program account promising an attractive interest rate that is paid monthly in the same type of cryptocurrency as originally invested, unless withdraws, the regulator said in the cease and desist order.

“After securing cryptocurrency transfers from retail investors, Voyager aggregates these cryptocurrencies to fund its various revenue-generating activities, including lending transactions, proprietary trading, cryptocurrency staking, currency and investments in other cryptocurrency trading platforms, such as Celsius Network,” the office said. .

The lack of protection and regulatory oversight subjects Voyager account investors “to additional risks not borne by investors who maintain assets with most SIPC member brokers, or with banks, savings associations or credit unions, although Voyager discloses the lack of digital asset insurance to investors,” the regulator added.

“Today’s action says loud and clear that the cryptocurrency securities market is not the Wild West, and that investor protection laws absolutely apply,” the attorney general said. Acting Platkin in a statement. “Through efforts like this, we continue to hold accountable anyone who threatens the integrity of our financial sector and puts investors at risk.”

Voyager Digital did not immediately respond to a request for comment.

This is the third action by the New Jersey Securities Bureau to stop a state-based cryptocurrency firm from offering and selling unregistered interest-bearing accounts, the agency said.

The Bureau issued a summary cease and desist order against BlockFi Lending, LLC, in July 2021 after the company raised at least $14.7 billion through what regulators said was an illegal sale of unrecorded titles in the world.

New Jersey reached an agreement with BlockFi in February 2022, requiring the company to stop selling its interest-bearing cryptocurrency accounts until they are registered with state and national securities regulators. federal government. The Securities and Exchange Commission demanded that BlockFi pay regulators a total of $100 million, including $943,396.22 in New Jersey.

In September 2021, the Bureau announced that it had obtained a cease and desist against Celsius Network LLC, which had raised at least $14 billion by selling unregistered securities, according to New Jersey.

“The rules are clear: Anyone selling securities in New Jersey must comply with state securities laws,” said Sean P. Neafsey, acting director of the New Jersey Division of Consumer Affairs. . “Our Securities Office will continue to protect investors by monitoring the market to make sure everyone is playing by the rules, especially when it comes to the ever-changing cryptocurrency market.”

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