By Nathan Ferguson
A cease-and-desist Directive has been issued by the New Jersey Bureau of Securities against Voyager Digital over the trade of unregistered securities via the Voyager Earn program thereof. VGX (Voyager Digital) is known as a centralized platform for lending, trading, as well as staking crypto. The directive asserts that every among the crypto lending and staking accounts offered via the program from 2019 onwards are categorized as unregistered securities due to the promise of returning high-interest rates as 12%.
The Bureau refers to the evidence for their assertion by highlighting the messages on the homepage of Voyager on which the platform persuades the consumers to enhance their portfolio and venture into the unique level of investing. According to the claim of New Jersey, there are nearly 52,800 accounts as well as $187M worth in assets from the clients living in the state with having 1.5M active accounts along with $5B in Voyager’s cumulative assets.
The marketing tactics of Voyager were additionally condemned as the regulators mentioned that the program-related promotions failed to reveal that Voyager Digital LLC (the parent company of Voyager) is an openly traded firm across Canada, rather than the United States. The directive asserts that this generates a deceptive image in terms of the regulatory status of Voyager Digital LLC.
In addition to this, the Bureau accuses that though Voyager asserts to be certified, just a few states have provided it with a license to execute the business of money services and, as Bureau puts it, that does not permit for the unregistered securities’ trade. In this way, it added, the unsophisticated investors might get deceived by the misleading impression that the platform has a license to provide as well as trade such securities.
A minimum of five out of the other states including Vermont, Kentucky, Texas, Oklahoma, and Alabama, have smacked Voyager with several orders demanding the firm to elaborate how the unregistered securities are not being sold by it if it still wants to carry on its activities in the very states. The incident counts to be included in the increasing series of orders issued against the crypto venues that provide the customers with interest-bearing accounts.
In February, BlockFi – a crypto lending forum – encountered an analogous cease-and-desist directive issued on the behalf of Washington with a penalty of $100M for trading unregistered securities for the interest-bearing accounts thereof.