The Federal Deposit Insurance Corporation is looking into Voyager Digital Ltd’s marketing of deposit accounts for cryptocurrency purchases, an FDIC official said, confirming a report in the Wall Street Journal.
Customers who assumed their deposits were insured by the FDIC learned otherwise after Voyager filed for bankruptcy and a banking regulator began an inquiry, the report said. https://on.wsj.com/3ygW7wE The FDIC official did not did not comment on details of the probe.
The battered crypto brokerage and lender filed for bankruptcy last week, becoming the latest casualty of a drastic fall in cryptocurrency prices.
Voyager declined to comment on the probe.
Crypto lenders boomed during the pandemic, but have recently run into difficulties following the downfall of a major token in May and global risk-off sentiment.
Voyager said last week it had more than $110 million of cash and owned crypto assets on hand. It intends to pay employees in the usual manner and continue their primary benefits and certain customer programs without disruption.
The firm did not have access to customer funds for its own purposes and the money, protected from creditors, is also segregated from its assets in bankruptcy, the WSJ report said. (Reporting by Mehnaz Yasmin in Bengaluru and Hannah Lang in Washington; Editing by Shailesh Kuber, Devika Syamnath and David Gregorio)