Voyager Digital’s CEO Stephen Ehrlich reportedly sold shares of the crypto platform and lender at its highest trading price a year and a half before the company went bankrupt, The Street reported Wednesday (Aug. 3).
The report said Ehrlich cashed out of the shares in February and March of last year — selling almost 1.9 million shares totaling $31 million between Feb. 9 and March 31 last year.
The biggest three transactions were almost $19 million combined, and were reportedly linked to a $50 million secondary offering by Stifel Nicolaus in February 2021.
Voyager Digital filed for bankruptcy last month, having frozen its customers’ assets.
Many crypto companies have been facing problems in the aftermath of the market hitting an all-time high last November, then falling fast this year, followed by many crypto exchanges freezing withdrawals.
Voyager’s lending business was a big part of the reason it’s now out of money — it reportedly loaned its clients’ funds to Three Arrows Capital, or 3AC, which defaulted on a $667 million loan from Voyager.
Voyager’s controversy and troubles got it a “stern warning” from the Federal Deposit Insurance Corporation, telling the company to quit “making false or misleading representations” that imply its customers’ funds are FDIC insured, PYMNTS wrote.
The biggest concern, according to a joint statement by the FDIC and the Federal Reserve Board, was that Voyager suggested on its website and social media that the company was FDIC insured and that customers would get FDIC insurance coverage, and that customers would be insured if Voyager itself failed.
But in reality, the company kept customer funds at Metropolitan Commercial Bank. The funds were only insured if that bank failed, not Voyager itself.
The FDIC gave Voyager two days to cut out anything on its publications that suggested otherwise.
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