Recently released court documents from the Voyager Digital bankruptcy case reveal that the United States Federal Trade Commission (FTC) is currently looking into the buying and selling of cryptocurrency firms. Like the US Securities and Exchange Commission (SEC), the FTC has previously taken action against FTX Shopping in the US and Voyager’s assets.
FTC Objection to the Proposed Voyager Sale Plan Could Have an Impact on the Bankruptcy
In a bankruptcy court filing dated February 22, 2021, the US Federal Trade Commission (FTC) stated that it is looking into the buying and selling of crypto-related firms by Voyager Digital. “The FTC has initiated an investigation into certain acts and practices of [Voyager] and [the] officers, directors, and employees of the debtors, in connection with their deceptive and unfair marketing of cryptocurrencies to the public,” the document reads.
The FTC submits that the proposed sale of the debtors’ assets could interfere with its current investigation. This could potentially exonerate Voyager and certain employee members from any alleged “fraud-related debts” held by a government agency. The FTC is not the only agency investigating Voyager. The Texas Attorney General and the Securities regulator took action against FTX Shopping prior to FTX’s bankruptcy.
The US Securities and Exchange Commission (SEC) objected to the acquisition of Binance US. Despite the objection, the sale was approved by the court. Voyager’s legal representative, Allyson Smith of Kirkland & Ellis, told the court that the sale was still “on track” to move forward. “We are on track and we do not anticipate any obstacles,” the lawyer added. However, according to the FTC’s latest filing, debtors might be “not entitled to a discharge here.”
“Furthermore, even if debtors were entitled to a discharge (through the operation of consensual releases, for example), the code specifically prohibits the discharge of fraud-related debts held by a government unit,” the objection closes. “Therefore, for the above reasons, the FTC respectfully requests that the court deny confirmation of the debtors’ proposed plan; delete Section VIII.B and D of the proposed plan; or grant any other relief that the Court deems just and appropriate.”
What do you think about the Federal Trade Commission’s investigation into Voyager Digital’s advertising practices? Let us know your thoughts in the comment section below.
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