Voyager co-founder fined $750K after Chapter 11 collapse

The once high-flying crypto lender Voyager Digital Ltd., which filed for Chapter 11 bankruptcy in July 2022, has returned to headlines after its co-founder and former chief executive Stephen Ehrlich was ordered to pay $750,000 to former customers.

On Sept. 15, the U.S. Commodity Futures Trading Commission (CFTC) announced the fine and barred Ehrlich from participating in commodity trading for three years, among other restrictions.

What happened to Voyager?

Voyager filed for Chapter 11 after the collapse of crypto hedge fund Three Arrows Capital (3AC) triggered a liquidity crisis, leaving the lender unable to meet customer withdrawals.

The consent order, filed in federal court in New York, settles a case that the CFTC initiated on Oct. 12, 2023, when it sued Ehrlich and Voyager for operating a fraudulent digital asset trading and custody platform.Stephen Ehrlich, CEO and co-founder of Voyager Digital Ltd., speaks at the North American Bitcoin Conference held at the James L Knight Center in 2022.Getty Images

According to Bloomberg, regulators said Voyager misrepresented itself to clients as a “safe haven” for digital assets, offering assurances comparable to traditional financial institutions. Instead, Voyager lent out billions in customer funds to risky third parties and enticed investors with promises of yields as high as 12% on crypto holdings.

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“This resolution once again highlights the CFTC’s important role in the digital asset space,” said Charles Marvine, acting chief of the agency’s retail fraud and enforcement task force.

“Compensating victims and limiting a defendant’s ability to cause future harm are squarely within the CFTC’s core mission.”

Another lawsuit settled

Ehrlich did not admit or deny the CFTC’s allegations but expressed relief that the matter was resolved. His attorney, Sarah Krissoff, said:

“Mr. Ehrlich looks forward to everything ahead and appreciates that the regulators recognized that resolving the actions, without further litigation, was the right thing to do.”

The case follows a separate settlement with the Federal Trade Commission over claims Ehrlich falsely told customers Voyager deposits were insured by the Federal Deposit Insurance Corporation. He agreed to pay $2.8 million to resolve those charges.

With the CFTC settlement now concluded, one of the last remaining regulatory challenges linked to Voyager’s collapse has been closed.

Voyager promoter lawsuit still ongoing

In 2022, billionaire Mark Cuban and his NBA team, the Dallas Mavericks, were sued for promoting Voyager as a safe and affordable way for fans to invest in cryptocurrency.

Story Continues

The class-action lawsuit alleges Cuban misled investors about the risks posed by Voyager. While some promoters, including Rob Gronkowski, Victor Oladipo and Landon Cassill, have reached settlements totaling around $2.4 million, Cuban and the Mavericks continue to face claims.

Edited by:Mehab Qureshi

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This story was originally reported by TheStreet on Sep 16, 2025, where it first appeared in the Bankruptcy News & Analysis section. Add TheStreet as a Preferred Source by clicking here.

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