Recently Bankrupt Voyager Investigated by FDIC Due to Claims of FDIC Insurance

The United States FDIC is investigating Canadian Bankrupt exchange Voyager over claims of FDIC insurance. Voyager's own marketing material claims "USD held with voyager is now FDIC insured," although both the FDIC's statements and Voyager's customer service agreement contradict this.

Over $350 Million is locked within the platform, and as users scramble to redeem funds, some quickly realize that the claimed FDIC insurance is much more bark than bite. A user on Reddit said, "I called the FDIC earlier, and they said Voyager Digital LLC was not a bank and was not FDIC insured. They said for future reference, LLCs can not be banks, ever.

This is problematic when many users rely on the claimed insurance to reimburse them for the lost funds. Voyager's published marketing material claims, "Through our strategic relationships with our banking partners, all customers' USD held in Voyager is FDIC insured. That means in the rare event your USD funds are compromised due to the company or our banking partner's failure, you are guaranteed full reimbursement. (Up to $250,000)”

Twitter user John Reed Stark said, "this conduct is criminal," and another user claims he dodged a bullet when he said, "I'm no genius here or even that detailed oriented of a person, but it was one reason why I almost considered putting my money into it." 

The fine print is often glossed over when reading the terms and conditions, and it appears this got a lot of users in trouble. Kchoudhu on Twitter said, "let's also not kid ourselves that anyone read the t&c when signing up. they just saw the yield and said YES!"

Many are not optimistic about the outcome of the investigation, in any case. Lots of red tape makes legal proceedings like this painfully drawn out. Another Twitter user said, "so in 3 to 5 years expect the DOJ and or SEC to file some charges related to it."

Author: Garrett Meifert

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