Report: Investigation Finds No Fault With Sullivan & Cromwell in FTX Bankruptcy

May 26, 2024 Bitcoin.com

NBA, football, NASCAR stars cough up $2.4M in Voyager promo suit

May 8, 2024 Coin Telegraph

Bankruptcy judge signs off on $450M FTX-Voyager settlement

April 29, 2024 Coin Telegraph

Bankruptcy

According to the terms of the deal, FTX will “relinquish any and all rights” to $450 million Voyager Digital has claimed from the crypto exchange.

A judge has granted a motion authorizing debtors for defunct cryptocurrency exchange FTX to enter a $450-million settlement agreement with bankrupt firm Voyager Digital.

In an April 29 filing in the United States Bankruptcy Court for the District of Delaware, Judge John Dorsey approved the terms of an agreement between FTX and Voyager, allowing the latter to settle all claims with the crypto exchange as part of a plan to compensate creditors. Both parties, subject to approval, will be able to agree that $5 million held in escrow by Voyager and an additional $445 million involved in a loan repayment lawsuit from Alameda Research will be released to the firm’s debtors. FTX will also “relinquish any and all rights” to the funds.

Paul Hage, the attorney responsible for representing Voyager Digital and its debtors, signed off on the deal, as did FTX restructuring officer and CEO John Ray III as of April 4. The settlement with FTX is one of many Voyager has been pursuing since the firm filed for bankruptcy in July 2022 amid a crypto market downturn.

Judge signs off on $1.65B settlement between Voyager Digital and FTC

November 28, 2023 Coin Telegraph

Judge signs off on .65B settlement between Voyager Digital and FTC

bitcoin regulation

The settlement between the crypto lending firm and the FTC was first announced in October and does not resolve former CEO Stephen Ehrlich’s pending case with the CFTC.

A federal judge has approved an order requiring crypto lending firm Voyager Digital and its affiliates to pay $1.65 billion in monetary relief to the United States Federal Trade Commission (FTC).

In a Nov. 28 filing in U.S. District Court for the Southern District of New York, Judge Gregory Woods ordered Voyager to pay $1.65 billion following a settlement between the lending firm and the FTC announced in October. As part of the agreement, Voyager will be “permanently restrained and enjoined” from marketing or providing products or services related to digital assets.

According to Judge Woods, the order will largely not impact proceedings in bankruptcy court, where Voyager filed for Chapter 11 protection in July 2022 and disclosed liabilities ranging from $1 billion to $10 billion. In May, the court approved a plan allowing Voyager users to receive 35.72% of their claims from the lending firm initially.

Under the settlement, parties associated with Voyager must cooperate with FTC officials, including testimony at hearings, trials and discovery. After a year, Voyager must also report on its compliance with the proceedings, subject to monitoring by the commission.

In October, the U.S. Commodity Futures Trading Commission and the FTC filed parallel lawsuits against former Voyager CEO Stephen Ehrlich, alleging he made misleading statements regarding the use and safety of customer funds. Ehrlich claimed at the time that Voyager’s team “consistently communicated and worked closely” with regulators, largely denying the allegations.

In July, the FTC ordered crypto lending firm Celsius to pay $4.7 billion in fees, alleging the company’s co-founders misappropriated user assets and misled investors about the platform’s services. U.S. officials arrested former Celsius CEO Alex Mashinsky, who remains free on bail until his trial, scheduled to begin in September 2024.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

Voyager Digital was ‘no better than a house of cards’ — CFTC commissioner

October 13, 2023 Coin Telegraph

Brokerage Platform

CFTC Commissioner Kristin Johnson’s comments came after separate lawsuits from the CFTC and FTC were filed against Voyager and its former CEO Stephen Ehrlich.

A commissioner for the United States Commodity Futures Trading Commission (CFTC) has slammed Voyager Digital for its mistakes that eventually led to the loss of billions of dollars of customer funds.

Statement of @CFTCjohnson regarding @cftc's charges against Voyager's chief executive officer. Learn more: https://t.co/OiBvOoCuV6
— CFTC (@CFTC) October 12, 2023

In an Oct. 12 statement, Commissioner Kristin Johnson took aim at Voyager for misleading practices, ignoring warning signs, and “bare-bones due diligence,” which failed to protect customers.

“Because of Voyager’s failures, the company became no better than a house of cards.”

The commodities said Voyager turned a blind eye to what its subsidiary investment firms were doing with its own customer funds:

“It is astounding that Voyager failed to exert pressure on the firms where it invested its customers' assets."

“Instead of demanding that investment firms that received customer assets offer greater levels of transparency, Voyager shirked the long-established expectations for custodians and simply dispatched customer funds with little effort to preserve the same," she added.

Johnson’s comments came after the regulator, along with the Federal Trade Commission, filed parallel lawsuits against Voyager’s former CEO Stephen Ehrlich on Oct. 12.

The CFTC lawsuit alleges Ehrlich and Voyager conducted fraud and “registration failures” over its platform and its “unregistered commodity pool”.

It has been frustrating watching lots of obvious malfeasance happening in crypto land and enforcement actions only target low-rent relatively tiny scam operations while the industry was building industrial scale predation machines.

This is not that pattern!
— Patrick McKenzie (@patio11) October 12, 2023

The FTC, on the other hand, reached a proposed settlement with Voyager, banning the firm from offering, marketing, or promoting any product or service that could be used to deposit, exchange, invest, or withdraw any assets, according to an Oct. 12 statement.

Voyager and its affiliates agreed to a judgment of $1.65 billion, which will go toward repaying customers in the bankruptcy proceedings.

Meanwhile, a separate Oct. 12 statement from CFTC Commissioner Caroline Pham said the regulator will continue to pursue action against cryptocurrency firms that misuse customer funds:

“There is a significant difference between managing investor money for the purpose of trading derivatives, and taking deposits and providing loans to others. Without financing and consumer credit, our economy would grind to a halt.”

However, Pham thinks the CFTC may have stepped outside the bounds of its authority in interpreting what constitutes a commodity pool operator:

“Such an interpretation is an overreach beyond our statutory authority and would disrupt well-established legal and regulatory frameworks for lending to institutions and consumer finance.”

On Sept. 7, Pham called for the CFTC to establish a cryptocurrency regulatory pilot program which would address the risks retail investors face.

Voyager filed for Chapter 11 bankruptcy in July 2022 where it indicated that it may owe anywhere between $1 billion to $10 billion in assets to more than 100,000 creditors.

The cryptocurrency brokerage firm opened withdrawals for customers in June.

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

CFTC weighs enforcement action against former Voyager Digital CEO: Report

October 6, 2023 Coin Telegraph

CFTC

Following the lending firm's bankruptcy filing in July 2022, U.S. officials were reportedly considering taking action against Stephen Ehrlich for violating derivatives regulations

Officials at the United States Commodity Futures Trading Commission (CFTC) were reportedly considering an enforcement action against Stephen Ehrlich, the former CEO of crypto lending firm Voyager Digital.

According to an Oct. 6 Bloomberg report, CFTC staff were considering taking action against Ehrlich following an investigation concluding the former CEO violated U.S. derivatives regulations prior to Voyager’s bankruptcy filing. The firm filed for Chapter 11 protection in July 2022 amid the crypto market downturn.

Ehrlich was reportedly “angered and perplexed” by the claims:

“These allegations appear to be one of those times where the referees are making new rules and calling foul after the game has ended.”

Voyager, still in the middle of bankruptcy proceedings, was already under scrutiny from the U.S. Federal Trade Commission “for [its] deceptive and unfair marketing of cryptocurrency to the public”. A bankruptcy court approved Voyager’s plan to repay customers in May, and the case was ongoing at the time of publication.

The CFTC has several cases pending against crypto firms which have the potential to make waves across the U.S. regulatory space, but many of the enforcement actions in 2023 have been brought by the Securities and Exchange Commission. Binance and its CEO Changpeng Zhao have pushed for authorities to dismiss an CFTC lawsuit filed in March while many executives at Binance.US have left the exchange amid regulatory scrutiny.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

Meet the judges that will preside over Coinbase and Binance’s SEC lawsuits

June 8, 2023 Coin Telegraph

Binance.us

One judge has ruled on a key crypto case of late, while the other has ruled on high-profile political cases in the United States in recent times.

Court filings have revealed the names of the two United States District Court Judges that will preside over the Coinbase and Binance lawsuits brought against them by the U.S. Securities and Exchange Commission.

The case of SEC v Coinbase will be heard by District Court Judge Jennifer H. Rearden in the Southern District of New York, filings show.

Meanwhile, District Court Judge Amy Berman Jackson will tackle the case of SEC v Binance in the District of Columbia, according to recent filings.

SEC v Coinbase: Judge Jennifer H. Rearden

Rearden, aged 53, was nominated by President Joe Biden to be a United States district judge in January 2022. She was confirmed by the Senate last September.

While Rearden’s tenure has been fairly short, she recently ruled on a crypto-related matter which involved a brush with Binance.US.

On March 27, Rearden approved the U.S. DOJ’s emergency motion to temporarily halt a $1.03 billion deal between Binance.US and the bankrupt crypto lending platform Voyager Digital.

The decision meant that impacted Voyager customers would have to wait longer to be paid out.

Rearden applied the “balance of hardship” test to arrive at the decision in favor of the U.S. government:

*Judge Rearden considered the public interest to be more at risk than the sovereign interests of Voyager customers. Source:* *CourtListener*

This later proved to be a deal breaker for Voyager, with Binance.US pulling out of the deal a month later, blaming a “hostile and uncertain regulatory climate in the United States” for its change in heart.

Voyager’s bankruptcy plan was finally approved on May 17 — however not by Rearden.

Prior to serving as a judge, Rearden worked as a commercial litigator and received her Juris Doctorate from New York Law School in 1996.

It should be noted that a judge's background, experience, or previous rulings in other cases are not an indication of the outcome of future cases.

SEC v Binance: Judge Amy Berman Jackson

Judge Jackson, aged 68, was appointed as a United States District Judge in March 2011 by then-U.S. President Barack Obama. Prior to that, she received her Juris Doctorate from Harvard Law School.

While Jackson has provided opinions in 888 cases, it appears that none of them have related to cryptocurrency-related disputes.

The SEC v. @Binance case has just been assigned to D.C. Judge Amy Berman Jackson.

Judge Berman Jackson previously served as a federal prosecutor, but she has also worked on the criminal defense side.

She was appointed to the bench by President Obama in 2010.

She has presided…
— MetaLawMan (@MetaLawMan) June 7, 2023

She has, however, adjudicated on several highly political disputes in recent times.

Jackson sentenced Paul Manafort Jr and Roger J. Stone Jr — former advisers and friends of former U.S. President Donald Trump — to 43 and 40 months imprisonment, respectively, over a series of charges related to a Russia investigation in 2019.

Trump shared negative sentiment towards Jackson and her decision.

Is this the Judge that put Paul Manafort in SOLITARY CONFINEMENT, something that not even mobster Al Capone had to endure? How did she treat Crooked Hillary Clinton? Just asking! https://t.co/Fe7XkepJNN
— Donald J. Trump (@realDonaldTrump) February 12, 2020

In May, Jackson approved a motion filed by the U.S. Department of Justice to block a deposition of Trump that was related to two other lawsuits filed by former FBI officials.

Jackson served as an assistant U.S. attorney in D.C. between 1980-1986.

While there, she received Department of Justice special achievement awards for her work on several high-profile murder and sexual assault cases.

The SEC sued Binance on June 5 and Coinbase on June 6, alleging the exchanges broke various securities rules, most notably for purportedly offering cryptocurrencies that the regulator considers to be unregistered securities.

Binance was accused of operating illegally in the United States.

Binance and Coinbase have both confirmed they will “vigorously” defend the lawsuits laid against them.

Magazine: Tornado Cash 2.0 — The race to build safe and legal coin mixers

Voyager Digital Provides Update on Reimbursement Plan for Creditors

May 6, 2023 Bitcoin.com

Crypto Biz: Google bullish on blockchain, UK’s $125M AI pledge, Voyager and Binance

April 28, 2023 Coin Telegraph

Binance

This week’s Crypto Biz explores Google expanding its Web3 program, the U.K.’s $125 AI pledge, FTX selling LedgerX and Binance.US backing out of its Voyager purchase.

At the intersection of tech and cryptocurrency news, the Google for Startups Cloud Program has expanded to include 11 blockchain firms. Together, the entities will provide grants, expertise and services to emerging Web3 entrepreneurs. Meanwhile, the United Kingdom government has allocated $125 million in funding for a task force aimed at accelerating the country’s artificial intelligence (AI) readiness. The task force will focus on ensuring sovereign capabilities, such as public services, and fostering the adoption of safe and reliable AI foundation models.

In other headlines, troubled cryptocurrency exchange FTX is set to sell its LedgerX futures and options exchange and clearinghouse for around $50 million to private equity investment office M7 Holdings, subject to court approval. Meanwhile, Binance.US has backed out of its agreement to purchase Voyager Digital’s assets, worth $1 billion, citing a “hostile and uncertain regulatory climate in the United States.”

This week’s Crypto Biz: Google expanding its Web3 program, U.K. pledging $125 million for an AI task force, FTX selling LedgerX for $50 million and Binance.US backs out of $1 billion Voyager asset purchase.

Google Cloud broadens Web3 startup program with 11 blockchain firms

Google for Startups Cloud Program has expanded to include 11 Web3 blockchain partners, such as Alchemy, Polygon, Celo and Hedera. Blockchain analytics company Nansen also announced that it has partnered with Google Cloud to provide real-time blockchain data for startups as part of the program. As part of the new Cloud Program, pre-seed Web3 startups can receive up to $2,000 in Google Cloud credits valid for two years, while seeded startups can access $200,000 over two years for Google Cloud and Firebase usage. Additionally, blockchain partners are offering grants of up to $3 million to seeded companies in the Google for Startups Cloud Program. Nansen will also use its database of over 250 million wallet labels to provide startups with real-time intelligence.

Calling seed to series A Web3 projects & startups:

Want to get up to $200K in ☁️ credits & exclusive benefits?
✅ Gated Discord channel with Google Cloud Web3 product & engineering
✅ Early access to Web3 products & roadmap
✅ Free advanced Web3 training
✅ VIP event access
— Google Cloud (@googlecloud) April 25, 2023

UK pledges nearly $125M to create ‘safe AI’ taskforce

The U.K. government has announced that it is providing 100 million pounds ($125 million) in initial funding to support a task force aimed at accelerating the country's readiness for AI. The task force is aimed at ensuring “sovereign capabilities,” which include public services, and fostering the adoption of "safe and reliable foundation models." This coincides with the U.K.’s commitment to becoming a science and technology superpower by 2030. The task force is expected to launch its first pilots of AI usage and integration targeting public services in the next six months. The U.K. is also pushing for “safe AI,” which aims to regulate technology to “keep people safe” without limiting innovation.

FTX sells LedgerX for $50M to affiliate of Miami-based exchange holding company

Cryptocurrency exchange FTX has agreed to sell its LedgerX futures and options exchange and clearinghouse to M7 Holdings, an affiliate of Miami International Holdings, for around $50 million. The deal, which is subject to approval from the U.S. Bankruptcy Court for the District of Delaware, is scheduled to be heard in court on May 4. The purchase of LedgerX is part of FTX’s ongoing efforts to monetize assets and deliver recoveries to stakeholders. FTX purchased LedgerX in August 2021 to expand its spot trading services. The FTX exchange is currently undergoing bankruptcy proceedings.

Binance.US backs out of $1B Voyager asset purchase, blames regulatory environment

Binance.US has backed out of its agreement to purchase bankrupt cryptocurrency brokerage Voyager Digital’s assets for $1 billion. The exchange blamed the move on the “hostile and uncertain regulatory climate in the United States.” The Voyager Official Committee of Unsecured Creditors tweeted its disappointment at the news and said it was investigating potential claims against Binance.US. Voyager and the creditors' committee have said they would now work on distributing cash and crypto to customers directly via the Voyager platform. Voyager declared bankruptcy in July 2021.

https://t.co/AZwoBOgsqS has made the difficult decision to exercise its right to terminate the asset purchase agreement with Voyager.

While our hope throughout this process was to help Voyager's customers access their crypto in kind, the hostile and uncertain regulatory climate…
— Binance.US (@BinanceUS) April 25, 2023

Crypto Biz is your weekly pulse of the business behind blockchain and crypto, delivered directly to your inbox every Thursday.

Binance Scraps Agreement To Purchase Embattled Crypto Lender Voyager, Cites ‘Hostile’ Regulatory Climate

April 27, 2023 The Daily Hodl

Voyager Digital