The New Jersey Bureau of Securities has issued a stop and desist order in opposition to Voyager Digital for promoting unregistered securities by means of its Voyager Earn program.

Voyager Digital (VGX) is a centralized, crypto-based staking, buying and selling, and lending platform.

The order claims that every of the crypto staking and lending accounts issued by means of this system since 2019 are unregistered securities due to their promise of rates of interest as excessive as 12%.

The Bureau cites as proof for the declare messages on Voyager’s homepage encouraging customers to “develop your portfolio” and “journey to the brand new frontier of investing.”

New Jersey claims that about 52,800 accounts and $187 million in property are from customers based mostly within the state, out of roughly 1.5 million energetic accounts and $5 billion in property on Voyager in complete.

Voyager’s advertising ways have been additionally criticized, with the regulators stating promotions for this system did not disclose that Voyager’s dad or mum firm Voyager Digital LLC is a publicly traded firm in Canada, not the U.S. The order claims that this “creates a deceptive impression with respect to Voyager Digital, LLC’s regulatory standing.”

The Bureau additionally alleges that whereas Voyager claimed to be licensed, it was solely licensed in some states to behave as a “cash providers enterprise,” which the Bureau states doesn’t enable for the sale of unregistered securities. It added the declare “could convey the deceptive impression to unsophisticated buyers that Voyager is “licensed” to supply and promote such securities.”

Not less than 5 different states, Alabama, Oklahoma, Texas, Kentucky, and Vermont, have slapped Voyager with varied orders, or demanded the corporate clarify how it isn’t issuing unregistered securities if it needs to remain in enterprise of their respective states.

This incident is one in a rising checklist of such instances or orders in opposition to crypto firms that supply interest-bearing accounts to customers. In February, crypto lending platform BlockFi was hit with an identical stop and desist order from Washington state and a $100 million penalty for promoting unregistered securities within the type of its interest-bearing accounts.

Class motion swimsuit in opposition to Coinbase alleges unregulated securities gross sales

Final September, the Securities and Trade Fee (SEC) threatened to sue crypto change Coinbase if it launched its long-awaited Coinbase Lend program. This program would have resembled Blockfi and Voyager’s interest-bearing accounts for crypto lenders. On the time, Coinbase CEO Brian Armstrong referred to as the SEC’s conduct “actually sketchy,” because the risk got here with none authorized overtures.