Securities in at least seven US states are currently cracking down on the Canadian crypto investments firm Voyager Digital over its interest-bearing crypto accounts, as informed by the Director of the Alabama Securities Commission, Joseph Borg, to CoinDesk. These seven states cover New Jersey, Alabama, Oklahoma, Texas, Kentucky, Vermont, and Washington. The securities believe that the firm’s Earn Program account might be another way of storing unregistered securities. It is why the securities regulators are currently filing separate legal actions of cease-and-desist against the firm, Voyager Digital.
“The thrust is to say, ‘OK guys, it’s time to come to the table,” said Borg.
This success comes to the securities commission after a year of trying to bring crypto interest accounts under their regulatory domain. The commission audited first company was BlockFi, which ultimately settled with state and federal regulators post paying a hefty fine of $100 million. BlockFi also swore to register their product as security.
Contemplating the similarities between Voyager Digital and BlockFi, Borg said, “There are some minor differences in the order, but the principles are the same.” Borg continued by saying that he was somewhat surprised that Voyager Digital did not receive the message post the BlockFi incident.
Voyager is aware of the cease-and-desist orders
The Canadian investment firm said in a statement that they are aware of or have received the cease-and-desist orders from the state securities divisions of Indiana, Kentucky, New Jersey, and Oklahoma. They further continued to have received similar orders from the state securities divisions of Alabama, Texas, Vermont, and Washington.
However, Voyager is currently conversing with the securities regulators to understand the orders better, especially since the firm believes them to be inaccurate. If the cease-and-desist orders turn effective, it will pause the firm’s new accounts or new assets opening via their Earn Program option.
They remarked, “Voyager is firmly convinced that its Earn Program and the Voyager Earn Accounts are not securities and intends to demonstrate its position and defend it as necessary and appropriate. Of course, Voyager supports appropriate regulation and will do its best to demonstrate to these regulators that Voyager has complied with the law.”
As of now, Voyager Digital has over $5 billion and 1.5 million clients as a part of their Earn Program.