FDIC Is Probing Bankrupt Voyager’s Insurance Claims: Report

FDIC is probing bankrupt Voyager’s insurance claims for allegedly duping customers with the Metropolitan Commercial Bank Insurance so let’s read more today in our latest cryptocurrency news.

The Federal Deposit Insurance Corporation – FDIC is probing Voyager Digital for deceiving users. The FDIC is a consumer protection agency that ensures user deposits, oversees financial institutions like banks, and protects investors in case of bank failure.
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Voyager Digital is a Toronto-based company that marketed all depositors in the company as being covered by the FDIC insurance via its partnership with Metropolitan Commercial Bank as its partner. In simple terms, they could have sold VOyager as an FDIC insured.

The FDIC spokesperson confirmed that only the Metropolitan Commercial Bank is insured and not Voyager so the depositors are not protected against Voyager’s failures like bankruptcy and loss in the value of products. A week ago, Voyager filed for bankruptcy after one of its debtors Three Arrows Capital owes it $650 million but went insolvent and left the user’s funds at risk. The Toronto Stock Exchange suspended the trading of the VOyager Stock at a 98% decline year to date. Today, Voyager announced that they will delist their shares from the Toronto Stock Exchange and the trading is also halted on the US OTC markets. In a blog post from 2019, VOyager described that the FDIC insurance covers both the banking partner’s failure just as it does for Voyager:

“In the rare event your USD funds are compromised due to the company or our banking partner’s failure, you are guaranteed a full reimbursement (up to $250,000).”

The wording was modified and the protection of FDIC insurance against Voyager failures was removed. In its place, we can read that:

 “In the rare event your USD funds are compromised, you are guaranteed a full reimbursement (up to $250,000), so the cash you hold with Voyager is protected.”

As recently reported, Voyager Digital became the second high-profile crypto company to file for bankruptcy in the past few days and joined Three Arrows Capital in doing so. The New York-based company and its affiliates took the step in the Southern District of New York as per the filing. According to the document, Voyager had 100,000 creditors and between $1 and $10 billion in assets for its liabilities.