Customers were promised a bonus by fake websites to submit claims via them. In truth, they caused financial hardship for their clients.
Bloomberg cited Darren Azman, a lawyer representing the business, who said that scammers targeted Voyager Digital clients during the month that they were allowed to withdraw cash from the collapsed cryptocurrency brokerage.
Between June 23 and July 22, $490 million was withdrawn by Voyager clients. During a hearing before the Bankruptcy Court for the Southern District of New York, Azman said that amount accounted for over 80% of the total available.
Bloomberg reports that fraudsters utilised a wide variety of techniques, one of which was to promise bigger profits to Voyager clients by linking them to fraudulent websites that stole their money.
Voyager consumers were getting letters, calls and emails purporting to be from Voyager CEO Stephen Ehrlich and fraudulently claiming better returns for users of a bogus website, according to a warning issued by the California Department of Financial Protection and Innovation (DFPI). This alert was issued on July 19. What the DFPI Said:
“The entire initial refund amount clients were anticipating to receive in the Voyager bankruptcy may be included in the mailings if it is accurate.”
According to Azman, just a small number of clients fell for the schemes. At its peak, Voyager served 3.5 million users and held $6 billion in cryptocurrency. After the failure of Three Arrows Capital, it declared bankruptcy on July 5, 2022. It is the first of the bankrupt cryptocurrency companies to provide refunds.
FTX US had planned to acquire Voyager’s assets in September, but the bankruptcy of FTX made that impossible. In April, Binance.US was going to purchase $1 billion worth of Voyager assets, but they abruptly changed their mind. In May, Judge Michael Wiles authorised a bankruptcy plan that paid creditors around 36 cents on the dollar for valid claims.
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