Crypto lender Voyager Digital was ordered to stop making “false and misleading” claims that its customer’s funds were insured by the government.
On Thursday, The U.S. Federal Reserve and the Federal Deposit Insurance Corp (FDIC) sent a letter to Voyager, outlined their concerns.
Voyager is accused of falsely claiming that itself and its customer’s funds to be insured by the FDIC and that customers were insured by the government corporation in the event of Voyager’s collapse.
According to the regulators, Voyager maintains at least one deposit account at the FDIC-insured Metropolitan Commercial Bank in New York, but this coverage does not extend to its customers.
The regulators said in the letter, “it appears that the representations likely misled and were relied upon by customers who placed their funds with Voyager and do not have immediate access to their funds”.
The regulators “demanded” Voyager to remove all material that suggested the above concerns and within two days, to provide written confirmation of compliance.
After stopping all customer transactions on its platform during the contagion hedge fund Three Arrows Capital, Voyager filed for Chapter 11 bankruptcy in New York in early July.