The Federal Deposit Insurance Corporation (“FDIC”) is investigating Voyager Digital’s (OTCQX:VYGVF) marketing on the safety of its customer deposit accounts for crypto purchases, the Wall Street Journal reported Thursday, citing a person with knowledge on the matter.
The FDIC’s inquiry comes as account holders of Voyager Digital (OTCQX:VYGVF), a crypto broker and lender that went bankrupt on July 6 amid a broad crypto market downturn, learned earlier in the week ended July 8 that they probably won’t be able to recoup 100% of their crypto.
While Voyager (OTCQX:VYGVF) suspended withdrawals on $350M in customer deposits due to liquidity issues, those funds are expected to be fully paid back to customers, but crypto assets held at the company is a different story, people familiar with the matter told the WSJ.
Nevertheless, Voyager (OTCQX:VYGVF) had promised that customer deposit accounts are protected by the FDIC for up to $250K. “Your USD is held by our banking partner, Metropolitan Commercial Bank, which is FDIC insured, so the cash you hold with Voyager is protected,” according to Voyager’s website.
The problem is the customer accounts are only eligible to be insured in the event of the banks’ failure, Metropolitan Commercial Bank said, as reported by the WSJ. So, account holders won’t be protected as a result of Voyager’s bankruptcy.
Towards the end of June, Voyager Digital issued a default notice to bankrupt crypto hedge fund Three Arrows Capital.