FTC files proposed order of $1.65bn settlement with Voyager Digital

FTC files proposed order of $1.65bn settlement with Voyager Digital

The Federal Trade Commission (FTC) has moved the New York Southern District Court to enter a proposed Order for Permanent Injunction, Monetary Judgment, and Other Relief against Voyager Digital. The relevant documents were filed with the Court on November 22, 2023.

Entry of the Stipulated Order would end the litigation against Voyager Digital, LLC, Voyager Digital Holdings, Inc., and Voyager Digital Ltd. Litigation against Defendant Stephen Ehrlich and Relief Defendant Francine Ehrlich is ongoing.

According to the proposed order, judgment in the amount of $1,650,000,000 is entered in favor of the Commission against Corporate Defendants, jointly and severally, as monetary relief. Corporate Defendants’ liability for this judgment shall be joint and several with any other Defendants to the extent subsequently ordered.

The Debtor Defendants will not object to allowance of Proof of Claim No. 12033 filed by the FTC against Voyager Digital, LLC and Proof of Claim No. 12032 filed by the FTC against Voyager Digital Holdings, Inc. in the Bankruptcy Case as general unsecured claims in the amount of $1,650,000,000.

“Corporate Defendants” means Voyager Digital, LLC, Voyager Digital Holdings, Inc., Voyager Digital Ltd., and their successors and assigns.

“Debtor Defendants” means Voyager Digital, LLC, Voyager Digital Holdings, Inc., and Voyager Digital Ltd.

The proposed order also envisages that Corporate Defendants are permanently restrained and enjoined from advertising, marketing, promoting, offering, or distributing, or assisting in the advertising, marketing, promoting, offering, or distributing of any product or service that can be used to deposit, exchange, invest, or withdraw assets, whether directly or through an intermediary.

It is also proposed thatI Corporate Defendants, Corporate Defendants’ officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, whether acting directly or indirectly, in connection with promoting or offering for sale any product or service are permanently restrained and enjoined from misrepresenting or assisting others in misrepresenting, expressly or by implication the benefits of Defendants’ products or services or any other material fact about Defendants’ products or services, such as the total costs; any material restrictions, limitations, or conditions; or any material aspect of its performance, efficacy, nature, or central characteristics.

Voyager commenced a voluntary Chapter 11 process in July 2022. As part of this process, the Company and its main operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court of the Southern District of New York.