FTC Opposes Voyager Restructuring Plan To Probe Into Deceptive Crypto Marketing
- The latest attempt at a bankruptcy reorganization plan by cryptocurrency broker Voyager Digital has drawn criticism from the Federal Trade Commission.
- The FTC might legally be prevented from taking legal action against the company if the court approves the scheme.
- A hearing to approve Voyager’s reorganization plan has been set for March 2 in Manhattan by bankruptcy judge Michael Wiles.
The US Federal Trade Commission (FTC) opposed Voyager’s restructuring plan on the grounds that it was investigating Voyager’s deceptive cryptocurrency marketing.
The FTC might legally be prevented from bringing legal action or levying sanctions against the company and its former workers if the judge approves the scheme as it is. The strategy was referred to as a “disguised discharge” by FTC attorney Katherine Johnson.
Johnson stated in a court declaration submitted that Voyager Digital is the subject of an FTC investigation for their deceptive and unfair marketing of cryptocurrency to the public.
“The FTC has commenced an investigation into certain acts and practices of Debtors and Debtors’ employees, directors, and officers, for their deceptive and unfair marketing of cryptocurrency to the public,” the documents stated.
Voyager announced a deal for Binance US to purchase its troubled assets after restarting the bidding process. Even further, the company created Binance US accounts for its US-based customers—provided they reside in states where Binance US is permitted to operate.
The selling of corporate assets to the cryptocurrency exchange Binance US was part of a bankruptcy plan put out by Voyager on January 13. Yet according to the FTC, the plan would also have exempted the business and its workers from any monetary claims, maybe including ones that were the result of misconduct.
The restructuring plan will release the company from liability for its fraud, willful misconduct, or gross negligence. Bankruptcy Judge Michael Wiles has scheduled a March 2 hearing in Manhattan to confirm Voyager’s restructuring plan.
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