Bankrupt cryptocurrency lender Voyager Digital and its executives are facing an investigation by the U.S. Federal Trade Commission (FTC) for allegedly deceptive marketing of cryptocurrency to the public.
The FTC’s legal filing on Wednesday emphasized that the bankruptcy plan proposed by Voyager could not interfere with its investigation into the case.
The FTC said that it has commenced an investigation into certain acts and practices of Voyager Digital, its employees, directors, and officers for their alleged deceptive and unfair marketing of cryptocurrency to the public.
The FTC’s mission is to protect the public from unfair business practices or competition, and the current investigation is in line with that objective.
On January 13, Voyager filed for bankruptcy and proposed a plan that included the sale of company assets to crypto exchange Binance US.
However, the FTC warned that the plan would release the company and its employees from financial claims, including those related to wrongdoing.
The FTC’s legal filing stated, “the release can be read to interfere with causes of action by a governmental unit like the FTC,” inhibiting the agency’s ability to prosecute its claims.
The case highlights the importance of transparency and honesty in the cryptocurrency industry, as well as the need for regulation to protect consumers from fraud and deceptive practices.
Last June, the FTC warned consumers that they had lost over $1 billion to crypto scams and bogus investment schemes.
As the investigation continues, the FTC is reminding consumers to be vigilant and cautious about cryptocurrency investments, as not all of them are legitimate.