Crypto company Voyager received cease and desist order by the New Jersey Bureau of Securities and this is only the latest in the series of orders and complaints against crypto interest-bearing account issuers in the US as we can see more in today’s latest cryptocurrency news.
The New Jersey Bureau of Securities issued a cease and desist order against Voyager Digital for selling unregistered securities via its Voyager Earn Program. Voyager is actually centralized and crypto-based staking, trading, and lending platform. The order claims that each of the lending accounts issued through the program since 2019 is unregistered because of the promise of interest rates as high as 12%. The Bureau cited as evidence include messages on Voyager’s homepage that encourage users to grow their portfolio and journey to new frontiers in investing.
The New Jersey regulator claims that about 52,800 accounts and $187 million in assets came from users based in the state and 1.5 million of them were active with $5 billion in assets on Voyager overall. Voyager received the order after its marketing tactics got criticized as well with the regulators stating promotions for the program failed to disclose that the parent company Voyager Digital LLC is a publicly-traded company in Canada and not the US. The order claimed that this can create a misleading impression of the LLC’s regulatory status.
The Bureau alleged that while Voyager claimed to be licensed, it was only licensed in some states and acted as a moeny service business which the Bureau states doesn’t allow for the sale of unregistered securities but added that claim that it could convey a misleading impression to unsophisticated investors that Voyager is licensed to offer and sell these securities.
Oklahoma, Texas, Kentucky, Alabama, and Vermont all slapped Voyager with orders and demanded that the company explains how it is not issuing unregistered securities if they want to stay in business in their respective states. The incident is one of the growing lists of cases or orders against crypto companies whcih offer interest-bearing accounts to the users also BLockFi crypto lending platform was hit with a similar order and a $100 million penalty for selling unregistered securities in the form of interest-bearing accounts.
The Securities and Exchange Commission threatened to use the crypto exchange Coinbase if they continued their lending program. This program would have resembled BlockFi and Voyager’s interest-bearing accounts but at the time Coinbase CEO Brian Armstrong called the SEC behavior sketchy.
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