Voyager Digital has been given a cease and desist order by the New Jersey Bureau of Securities for vending unregistered securities through its Voyager Earn program. Voyager Digital (VGX) is a cryptocurrency-based centralized staking, trading, and lending platform.
According to the judgement, all crypto staking and lending accounts established through the program since 2019 are unregistered securities due to the promise of interest rates as high as 12%.
As support for the assertion, the Bureau cites messages on Voyager’s homepage inviting visitors to “build your portfolio” and “travel to the new frontier of investment.”
According to New Jersey, around 52,800 accounts and $187 million in assets are from users based in the state, out of approximately 1.5 million active accounts and $5 billion in assets on Voyager overall.
Voyager’s marketing strategies were also questioned, with regulators claiming that program advertising neglected to disclose that Voyager’s parent firm, Voyager Digital LLC, is a publicly traded corporation in Canada, not the United States. According to the order this “creates a deceptive impression regarding Voyager Digital, LLC’s regulatory status.”
The Bureau further claims that, while Voyager purported to be licensed, it was only licensed in a few jurisdictions to operate as a “money services firm,” which does not allow for the selling of unregistered securities, according to the Bureau. It went on to say that the assertion “may give inexperienced investors the false impression that Voyager is “licensed” to offer and sell such products.”
This event is one of an increasing number of similar cases or orders against cryptocurrency companies that provide consumers with interest-bearing accounts. BlockFi, a crypto lending platform, was striked with a similar cease and desist order from Washington state in February, as well as a $100 million penalty for vending unregistered securities in the form of interest-bearing accounts.
