Former CEO of Voyager Digital Agrees to Ban and $2.8 Million Payment to Resolve FTC Charges

Stephen Ehrlich, the former CEO of crypto platform company Voyager Digital, will pay $2.8 million to resolve the Federal Trade Commission’s charges that he and his company misled consumers. Ehrlich has also agreed to a ban on marketing or selling retail products or services used to buy, sell, deposit, or trade cryptocurrency.

The FTC charged in its October 2023 complaint that Voyager and its CEO Stephen Ehrlich falsely promised that consumers’ deposits were FDIC-insured and would be “as safe with us as at a bank” to convince them to hold and trade cryptocurrency on Voyager. In reality, most funds were not FDIC-insured, and Voyager’s customers lost more than $1 billion in cryptocurrency when the company failed, according to the FTC’s complaint.

The complaint also alleges that when the company failed it blocked consumers from accessing their assets, including their life savings, college tuition funds, and down payments for homes. Consumers were locked out of their cash accounts for more than a month, according to the complaint.

The FTC previously reached a settlement with Voyager Digital, LLC, and its affiliated companies, which the court entered on November 23, 2023.

The proposed settlement requires Ehrlich and his wife, Francine Ehrlich, who is named in the complaint as a relief defendant, to pay $2.8 million. The proposed settlement will also prohibit Stephen Ehrlich from:

• marketing or selling retail products or services that can be used to buy, sell, deposit, or trade crypto;
• making misrepresentations regarding any product or service;
• making false representations to any customer of a financial institution to obtain or attempt to obtain their financial information; and
• disclosing nonpublic personal information about consumers without their express consent.

The Commission vote approving the stipulated final order was 3-0. The FTC filed the proposed order in the U.S. District Court for the Southern District of New York. Stipulated final orders have the force of law when approved and signed by the District Court Judge.

The staff attorneys on this matter are Mark Glassman, Quinn Martin, and Elizabeth Arens of the FTC’s Bureau of Consumer Protection.