Securities regulators in Texas and Alabama announced today that they are expanding their investigation into Voyager following the emergence of new information following the exchange’s collapse.
“What we are seeing now is that these crypto-lending firms have not fully disclosed what they were doing behind the investors money,” said Joe Rotunda, enforcement director at the Texas State Securities Board. ” bloomberg, “The risks associated with those types of lending practices, or even other types of transactions that they engage in.”
The news service reported that state officials are investigating whether Voyager properly disclosed material information about its loans and borrowers’ creditworthiness.
Regulators in Texas, Alabama and New Jersey have each launched investigations into crypto exchanges Voyager Digital Ltd. and Celsius Network Ltd., after the firms halted customer withdrawals last month.
On Tuesday, Voyager filed for Chapter 11 bankruptcy protection, causing the publicly traded company’s stock to fall nearly 12%. The following trading day, trading on the Toronto Stock Exchange was halted after the stock fell 26% to $0.26.
Voyagers, today we embarked on a voluntary financial restructuring process to safeguard assets on the platform, maximize value for all stakeholders, especially customers, and emerge as a stronger company. Voyager will be operating full time. https://t.co/TxlO4eua8E
Even a $500 million bailout by Sam Bankman-Fried’s Alameda Research last month did not slow Voyager’s explosion. Voyager’s bankruptcy filing revealed that Alameda Research owed Voyager $377 million.
According to bloomberg, regulators were also examining by-product offerings on Voyager and Celsius, including whether they were unregistered securities. Both the crypto-firms returned exceptionally high rates of return like 12% and 17% respectively.
Both companies are still promoting these rates on their websites.
“We are investigating these companies and trying to figure out what happened and why,” said Amanda Sen, chief deputy director of the Alabama Securities Commission. bloomberg, “We’re making inquiries. It’s still an early stage, but we have a responsibility on behalf of our investors in our states.”
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