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Voyager: 30-Day Withdrawal Period Becomes Breeding Ground For Scammers

Fraudulent actors targeted Voyager Digital patrons as they briefly gained the opportunity to withdraw portions of their funds from the insolvent cryptocurrency brokerage. Bloomberg’s report, referencing insights from Darren Azman, the company’s legal representative, disclosed that scammers seized this month-long window.

The scammers employed diverse tactics in a range of stratagems detailed by Bloomberg. Among these, a prevalent approach involved luring Voyager customers with promises of elevated returns via counterfeit websites. Tragically, these sites siphoned the unsuspecting customers’ wallets once connected. 

Azman further revealed that law enforcement agencies have been duly informed and are actively addressing the distressing situation.

Voyager Customers Withdraw Nearly Half A Billion Amid Scam Alert

During the period spanning from June 23 to July 22, Voyager clientele executed withdrawals amounting to $490 million. This substantial sum, approximately 80% of the available funds, was disclosed by Azman during a telephone session of the Southern District of New York Bankruptcy Court.

The predicament didn’t elude attention during its occurrence. The California Department of Financial Protection and Innovation (DFPI) took action, issuing a cautionary advisory regarding Voyager customers falling victim to deceptive tactics.

As of today, the market cap of cryptocurrencies stood at $1.14 trillion. Chart: TradingView.com

Fraudulent letters, calls, and emails bearing the name of Voyager CEO Stephen Ehrlich were employed to inflate returns through a counterfeit website. This notice, dated July 19, carried an important message:

“The communications may include correct consumer information, including the total initial return amount customers were expecting to receive in the Voyager bankruptcy.”

Fortunately, the ruse managed to deceive only a few customers, as noted by Azman.

A Tale Of Crypto Collapse

Before its dramatic downfall, Three Arrows Capital, or 3AC, had commanded an impressive $10 billion in assets under its management. The crux of 3AC’s operational approach revolved around sourcing industry funds and channeling these resources into diverse cryptocurrency ventures.

The grand plan, however, imploded spectacularly as the demise of terraUSD dealt a devastating blow to its financial stability.

In the wake of 3AC’s catastrophic missteps, Voyager was entangled in a web of financial turmoil. The cascade of events that ensued was nothing short of a rollercoaster ride for the company.

Reacting to 3AC’s failure to honor its loan obligations, Voyager took decisive action on July 1. The suspension of “trading, deposits, withdrawals, and loyalty rewards” was a necessary but painful step to mitigate the brewing crisis.

Four days later, the inevitable became a reality as Voyager filed for Chapter 11 bankruptcy protection. The company’s rapid descent from its pinnacle was a sobering testament to the unforgiving nature of the crypto landscape.

Featured image from PYMNTS

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