US crypto exchange Voyager Digital gets hit with a lawsuit for the sale of unregistered securities.
The lawsuit follows a string of moves by regulators to curb the use of crypto-yielding programs.
Last September, Coinbase shelved its ‘Lending’ program following an SEC threat of legal action.
Also crypto market negative has been the sharp increase in illicit activity, driven by North Korean and Russian cybercriminals.
With the Ripple v SEC case also ongoing, regulators have been quick to stamp out undesired activity elsewhere within the digital asset world.
Voyager Digital Joins a Growing List of Platforms Facing Charges
This week, news hit the wires of Voyager Digital getting hit with new allegations of selling unregistered securities via its Voyager Earn Program.
On Thursday, lawyers Adam Moskowitz and Stuart Grossman filed a complaint in a Miami federal court. The lawyers claim that Voyager Digital should have registered its Voyager Earn Program, which offers rewards on Bitcoin (BTC), Ethereum (ETH), and USD Coin (USDC), among other cryptos, with the SEC.
The Voyager Earn Program allows users to stack an earn on over 40+ assets. Stackers can earn tiered rewards based on how much they hold. Tiered annual percentage yields (APY) can go as high as 12%, while the platform offers APYs of as much as 9% for stacking USDC.
The lawyers originally filed a complaint against Voyager Digital in December on behalf of Florida resident Mark Cassidy alleging the firm charged hidden fees and made false promises. Within the new claim, the lawyers also highlighted steps taken by the SEC against the crypto firm.
Earlier this year, US states issued Voyager Digital with cease and desist orders over the offering of crypto-yielding products. These included the states of Indiana, Kentucky, New Jersey, and Oklahoma.
Exchanges Offering Crypto Yielding Products Face an Uphill Battle
In 2021, Coinbase announced SEC plans to sue them over the planned release of “Coinbase Lend”. Coinbase Lend would offer customers to earn interest on selected cryptos, with APYs starting at 4% on USD Coin.
As a result of the SEC’s intentions, Coinbase shelved the Lend program despite the SEC’s failure to provide any rationale behind sending a Wells notice.
Coinbase likely saved a sizeable sum by shelving its Lend program. This year, BlockFi paid a $100m fine for failing to register the offer and sales of its crypto lending products.
The settlement came following the SEC alleging that BlockFi’s high-yielding accounts are unregistered securities.
This article was originally posted on FX Empire