The Commodity Futures Trading Commission (CFTC) has ordered Stephen Ehrlich, Co-Founder and former CEO of now-bankrupt crypto lender Voyager Digital, to pay $750,000 to customers who lost money due to the firm’s collapse.
The order, announced on Monday, also bans him from trading commodities for three years and imposes further restrictions. Ehrlich neither admitted nor denied the regulator’s allegations, but agreed to the settlement through a consent order filed in a federal court in New York.
CFTC cracks down on fraud in digital assets
The case highlights the CFTC’s growing role in policing misconduct in the crypto industry. “Compensating victims and limiting a defendant’s ability to cause future harm are squarely within the CFTC’s core mission,” said Charles Marvine, Acting Chief of the agency’s Retail Fraud Task Force.
The regulator first sued Ehrlich in October 2023, accusing him and Voyager of misleading customers by promoting the platform as a “safe haven” for crypto holdings, but allegedly took reckless risks by lending billions in customer funds to high-risk third parties.
Voyager promised high returns of up to 12% on certain digital asset commodities stored on its platform.
Ehrlich pushed back against the allegations at the time, saying he was “outraged and deeply dismayed.” However, his attorney now says he is “pleased to resolve” the matter without further litigation.
Multiple settlements with regulators
This is not Ehrlich’s first settlement with U.S. regulators. In June, he agreed to pay $2.8 million to resolve charges from the Federal Trade Commission (FTC). That case centered on claims that Voyager misled customers about having Federal Deposit Insurance Corporation (FDIC) protection.
With the latest settlement, Ehrlich will pay financial fines and place a cap on his future business operations, as regulators indicate that they will be increasingly strict towards crypto platforms that promise and fail to deliver.
Also Read: SEC And CFTC Launch Joint Push for Crypto Regulation Clarity
