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- Voyager Digital misinformed users over the extent of FDIC insurance on its platform
- The company tweeted in 2020 that user deposits up to $250,000 in USD were insured
- However, this insurance only covers a collapse of the platform’s partner bank, not Voyager Digital itself
Voyager Digital customers who were told that their USD holdings on the platform were protected by Federal Deposit Insurance Corporation (FDIC) have had their reassurances scuppered almost instantly. The lending platform, which announced yesterday that it was filing for bankruptcy, moved to reassure USD holders on the platform that they would have access to their holdings after certain hurdles were cleared with its partner bank, Metropolitan Commercial Bank. However, the FDIC coverage in place for Voyager users covers the collapse of the bank, not the platform, meaning that many may have invested under false pretences.
Voyager Digital Claimed Deposits Were Insured
Voyager Digital filed for bankruptcy yesterday, just days after halting withdrawals, becoming the latest victim of the crypto credit crunch. In announcing the bankruptcy, Voyager Digital informed USD holders that their deposits would be returned to them “after a reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank.”
This assertion is made partially on the back of an assumption that FDIC protection extends to USD deposits on the platform, as Voyager Digital informed its users in November 2020:
Have you heard? USD held with Voyager is FDIC insured up to $250K. Our customers’ security is our top priority. Start growing your crypto portfolio today.
— Voyager (@investvoyager) November 12, 2020
However, the agreement in place between Metropolitan Commercial Bank and Voyager Only covers collapse of the bank, not the collapse of the platform, as was confirmed yesterday by the bank:
FDIC insurance coverage is available only to protect against the failure of Metropolitan Commercial Bank. FDIC insurance does not protect against the failure of Voyager, any act or omission of Voyager or its employees, or the loss in value of cryptocurrency or other assets.
This means that those who invested their USD onto the Voyager Digital platform on the back of assertions from the platform that USD deposits were insured up to $250,000 now find themselves in the position of this safety blanket being ripped from under them – a rug pull of the highest order.
It’s fair to say that this oversight did not go unnoticed:
well somebody’s gonna get sued lol.https://t.co/ea4Q1xKbv9
— ⚯ Michel de Cryptadamus ⚯ (@Cryptadamist) July 2, 2022
Court for 3-5 years
— FROG-E-NOMICS (@SHIBAATTACKNOW) July 2, 2022
If there are any hiccups in the process of getting USD back to customers, as one might expect their could be given the Voyager Digital situation right now, these customers will feel rightly aggrieved that they were lied to, and may well seek to take legal action if there are any issues in receiving their deposits.