Crypto lender Voyager Digital has been directed to take away “false and deceptive” statements that its consumer’s deposit accounts are FDIC insured.

In a joint letter written on Thursday by Seth Rosebrock and Jason Gonzalez, assistant basic counsel on the Federal Reserve and the Federal Deposit Insurance coverage Company (FDIC) to Voyager Digital, the authors stated the representations “probably misled and have been relied upon” by clients who positioned funds with Voyager who now not have entry to it:

“These representations are false and deceptive and, based mostly on the knowledge now we have so far, it seems that the representations probably misled and have been relied upon by clients who positioned their funds with Voyager and should not have instant entry to their funds.”

The Fed and FDIC allege that Voyager “made numerous representations on-line, together with its web site, cellular app, and social media accounts” which steered it was:

“(1) Voyager itself is FDIC-insured; (2) clients who invested with the Voyager cryptocurrency platform would obtain FDIC insurance coverage protection for all funds offered to, held by, on, or with Voyager; and (3) the FDIC would insure clients towards the failure of Voyager itself.”

The letter moreover demanded that Voyager present written affirmation of its compliance with the regulator’s requests inside two enterprise days, and supply a full itemizing of all statements concerning any reference to FDIC insurance coverage inside 10 days.

It additionally warned that even when Voyager met the calls for outlined within the cease-and-desist letter, it gained’t preclude the regulator from taking additional motion if deemed applicable.

Voyager’s web site at present states that it has labored with the FDIC to replace and make clear the language surrounding FDIC insurance coverage on its web site in early 2021 and early 2022.

Presently, the language surrounding FDIC insurance coverage states that United States greenback in Voyager money account is held atMetropolitan Industrial Financial institution (MCB) and is FDIC insured:

“FDIC insurance coverage doesn’t shield towards the failure of Voyager, however to be clear: Voyager doesn’t maintain buyer money, that money is held at MCB.”

Cointelegraph reached out to Voyager for remark however didn’t obtain an instantaneous response by the point of publication.

Solely July 6, Voyager Digital filed for chapter, citing money owed of as much as $10 billion to roughly 100,000 collectors amid market turmoil initially attributable to the collapse of the Terra ecosystem and subsequently worsened as Singaporean hedge fund Three Arrows Capital (3AC) defaulted on a $670 million mortgage on