Voyager Digital

Voyager Digital Holdings, Inc. and two affiliated debtors filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the Southern District of New York on July 5, 2022.³ The Federal Trade Commission announced a settlement with Voyager that permanently banned it from handling consumers' assets and filed suit against former CEO Stephen Ehrlich for falsely claiming customers' accounts were FDIC insured.⁴ In March 2023, the Bankruptcy Court confirmed Voyager's plan to liquidate its assets and distribute them to creditors, and Voyager is no longer operating.¹⁰

Timeline

Money raised

The CFTC obtained a court order requiring Stephen Ehrlich to pay $750,000 in disgorgement to Voyager customers.¹⁴

Investors named in the sources: Voyager Digital⁸.

What happened

Voyager Digital Ltd. was founded in 2018.¹⁷ Voyager operated a cryptocurrency brokerage platform that allowed customers to buy, sell, trade, and store digital assets.¹⁰ Voyager also offered an interest-bearing product known as the Voyager Earn Program, which enabled customers to earn returns on deposited digital assets.¹⁰ Voyager is a cryptocurrency company that offers its customers interest-bearing crypto accounts.¹² Voyager is not registered under Louisiana Securities Law.¹²

On July 1, 2022, Voyager announced that it was temporarily suspending all trading, deposits, withdrawals and loyalty awards.¹² On July 5, 2022, Voyager Digital Holdings, Inc. and two affiliated debtors filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the Southern District of New York.³ The Debtors' cases have been assigned to Judge Michael E. Wiles.³ On July 6, 2022, Voyager announced it and its U.S. affiliates (Voyager Digital Ltd. and Voyager Digital, LLC) have commenced voluntary Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of New York.¹² Voyager's bankruptcy filings state that the company does not maintain a separate cryptocurrency wallet for each customer; instead, all cryptocurrency assets are combined into a commingled wallet and swept from the commingled wallet to a third-party custodian account.¹²

Voyager's initial plan to exit bankruptcy states that it expects account holders to be 'impaired' under the plan, which indicates the company expects that the rights of account holders will be negatively affected by the plan.¹² In March 2023, the Bankruptcy Court confirmed Voyager's plan to liquidate Voyager's assets and distribute these assets to creditors.¹⁰ Under the confirmed plan, a Plan Administrator was appointed to oversee the liquidation process and creditor distributions.¹⁰ Voyager is no longer operating and is in the process of liquidating its assets for the benefit of creditors.¹⁰ The plan's exculpation clause protected parties against liability for engaging in transactions in furtherance of rebalancing transactions and the completion of distributions of cryptocurrencies to creditors under the plan.¹³

In April 2023, the U.S. government and the U.S. Trustee reached an agreement with the debtors to a narrow stay of the exculpation clause and allowed the remainder of the plan and confirmation order to go effective after the debtors pivoted to a self-liquidation under the plan following the termination of a sale to Binance.US.¹³ The Voyager Digital debtors' chapter 11 plan went effective in May 2023.¹³ The Federal Trade Commission announced a settlement with bankrupt crypto company Voyager that will permanently ban it from handling consumers' assets.⁴ The Federal Trade Commission is filing suit against its former CEO, Stephen Ehrlich, for falsely claiming that customers' accounts were insured by the Federal Deposit Insurance Corporation (FDIC) and were 'safe'.⁴ The CFTC obtained a court order requiring Stephen Ehrlich to pay $750,000 in disgorgement to Voyager customers.¹⁴

On March 20, 2026, the Texas State Securities Board entered a Consent Order resolving allegations against Voyager Digital Ltd., Voyager Digital Holdings, Inc., and Voyager Digital, LLC.¹⁰ On April 12, 2022, the TSSB initiated administrative enforcement proceedings against Voyager by issuing a Notice of Hearing alleging violations of state securities laws.¹⁰ These allegations included the offering and sale of unregistered securities, acting as unregistered dealers and agents, and making materially misleading and deceptive statements to investors.¹⁰ On August 4, 2026, U.S. District Judge Laura Taylor Swain issued an order vacating the exculpation provisions in Judge Michael Wiles' March 2023 decision confirming the Voyager Digital debtors' chapter 11 plan.¹³ Judge Swain found the bankruptcy court lacked authority under the quasi-judicial immunity doctrine to grant prospective protection for liability in connection with cryptocurrency transactions under the plan.¹³

The district court vacated the confirmation order to the extent it approved the exculpation provision and remanded for further proceedings.¹³ The past two years have seen a cluster of interrelated Chapter 11 bankruptcy cases involving five major U.S.-based cryptocurrency companies: Voyager Digital, a crypto brokerage; Celsius Network, a crypto exchange; FTX and Alameda Research (FTX), a crypto exchange and hedge fund respectively; BlockFi, a crypto lender; and Genesis Global, a crypto lender.⁵ The domino effect that ultimately led to the filing of these five major U.S.-based crypto companies began in 2022, after the crypto market fell by approximately two-thirds in the first half of the year, and the BVI-based crypto hedge fund Three Arrows Capital (3AC) collapsed.⁵ 3AC's failure led to losses for Voyager, Celsius, FTX, BlockFi, and Genesis, which all had significant lending exposure to 3AC.⁵ Most of the five U.S.-based companies also had significant lending exposure to each other, such that the ripple that was the 3AC collapse quickly turned into a tidal wave which led (together with other market disruptions) to the other U.S.-based crypto companies freezing withdrawals by customers and repayments to lenders and/or imposing strict trading limitations.⁵

This eventually led them to initiate Chapter 11 proceedings.⁵ The U.S. Securities and Exchange Commission (SEC), U.S. Department of Justice (DOJ), Federal Trade Commission (FTC), and Commodity Futures Trading Commission (CFTC), among others, brought investigations that led in some cases to criminal charges and in all cases to substantial civil claims to be administered in the respective companies' Chapter 11 cases.⁵ During the reorganization of the five U.S.-based companies, crypto prices remained volatile: Bitcoin, the value of which serves as an indicator for the health of the crypto market as a whole, rose from a nadir of less than $17,000 in mid-2022 through early 2023 to approximately $44,000 in early 2024, and sits at more than $85,000 as of November 2024.⁵ The Chapter 11 cases of these five U.S.-based crypto companies presented three major novel issues for bankruptcy courts and practitioners: issues relating to inter-debtor claims, claims by regulators and other government entities, and the Bankruptcy Code's 'dollarization' provision.⁵

Legal outcomes

• settledThe Federal Trade Commission announced a settlement with bankrupt crypto company Voyager that will permanently ban it from handling consumers' assets.⁴
• filedThe Federal Trade Commission is filing suit against its former CEO, Stephen Ehrlich, for falsely claiming that customers' accounts were insured by the Federal Deposit Insurance Corporation (FDIC) and were 'safe'.⁴
• settledThe CFTC obtained a court order requiring Stephen Ehrlich to pay $750,000 in disgorgement to Voyager customers.¹⁴
• settledOn March 20, 2026, the Texas State Securities Board entered a Consent Order resolving allegations against Voyager Digital Ltd., Voyager Digital Holdings, Inc., and Voyager Digital, LLC.¹⁰
• filedOn April 12, 2022, the TSSB initiated administrative enforcement proceedings against Voyager by issuing a Notice of Hearing alleging violations of state securities laws.¹⁰
• filedThese allegations included the offering and sale of unregistered securities, acting as unregistered dealers and agents, and making materially misleading and deceptive statements to investors.¹⁰
• filedOn August 4, 2026, U.S. District Judge Laura Taylor Swain issued an order vacating the exculpation provisions in Judge Michael Wiles' March 2023 decision confirming the Voyager Digital debtors' chapter 11 plan.¹³

Where the founders are now

Stephen Ehrlich is Chief Executive Officer and co-founder of Voyager Digital Ltd.¹⁷ The Federal Trade Commission is filing suit against its former CEO, Stephen Ehrlich, for falsely claiming that customers' accounts were insured by the Federal Deposit Insurance Corporation (FDIC) and were 'safe'.⁴ The CFTC obtained a court order requiring Stephen Ehrlich to pay $750,000 in disgorgement to Voyager customers.¹⁴

Sources

3. Epiq 11, dm.epiq11.com, Jul 5, 202
4. FTC Reaches Settlement with Crypto Company Voyager Digital; Charges Former Executive with Falsely Claiming Consumers’ Deposits Were Insured by FDIC, Federal Trade Commission, 2023-10-12
5. Novel Issues in the Crypto Bankruptcy Cluster, bankruptcyroundtable.law.harvard.edu, Feb 4, 202
8. Voyager Digital | Portfolio & Latest Investments, DroomDroom
10. Texas State Securities Board Enters Consent Order with Voyager Digital Entities | Texas State Securities Board, ssb.texas.gov, Mar 23, 20
12. Voyager Digital Files Chapter 11 Bankruptcy, Louisiana Office of Financial Institutions, 2022-07-06
13. District Court Partially Vacates Voyager Digital Confirmation Order, Finds Bankruptcy Court Lacked Authority to Approve Exculpation Provision in US Gov’t Appeal, Octus, Aug 4, 202
14. CFTC Obtains Court Order to Return $750000 to Voyager ..., cftc.gov, Sep 15, 20
17. Speaker Details: ICR Digital Asset Series | Part II | Fireside Chat with Stephen Ehrlich, CEO of Voyager Digital, icr.swoogo.com

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

If a fact on this page is wrong, use "Report an error" below and attach the record that shows the correct fact. Every report is reviewed by a person before anything changes, and a corrected page says when it was last corrected.

All case files2022crypto