The New Jersey Bureau of Securities ordered the cryptocurrency platform to stop selling securities in the form of “unregistered interest-bearing accounts”.
Crypto trading platforms have undergone a lot of regulatory scrutiny for their services of high-yield savings accounts that offer significantly higher interest rates than traditional financial institutions.
Voyager Digital offers interest rates from 1% to 9%, which are among the highest on the market. However, the NJ Department of Law & Public Safety is trying to crack down on these services because they fall under “unregistered securities.”
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According to the New Jersey Office of Attorney General (NJOAG) report, Voyager Digital has repeatedly violated the securities law that prohibits crypto platforms from offering “revenue-generating activities” such as financing and staking services through unregistered securities.
The cryptocurrency market is not exempt from NJ’s investor protection laws. Our Bureau of Securities has ordered another company to stop selling unregistered securities in the form of interest-bearing accounts that have raised some $5 billion nationwide. https://t.co/ruD9oKvStm
— Acting AG Matthew J. Platkin (@NewJerseyOAG) March 29, 2022
The Bureau emphasizes that Voyager Digital’s high-yield services are not formally registered with the regulatory authorities, are not insured, nor are they protected against financial fraud by government agencies such as the SIPC, FDIC and the NCUA.
Acting Director of Consumer Affairs Sean P. Neafsey laid out the rationale behind the Voyager Digital investigation:
“The rules are clear: Anyone selling securities in New Jersey must abide by state securities laws. Our Bureau of Securities will continue to protect investors by monitoring the market to ensure everyone follows the rules, especially if it is about the ever-evolving cryptocurrency market.”
Similarly, Amy G. Kopleton, who is the acting executive chef at the Bureau, argued that while crypto platforms such as Voyager Digital can operate in the same way as regular financial services companies, they do not guarantee protections and “regulatory oversight”, leaving investors in trouble. . risk.
Currently, approximately $5 billion worth of cryptocurrencies has been staked in Voyager Digital’s earning programs.
In February, BlockFi was under the microscope of the Securities and Exchange Commission (SEC) for its high-yield bearing services. The platform paid a $100 million fine and continued its strike program.
by Dom Z. – Crypto Analyst, BitDegree