It seems like every day; there's a new crypto company promising the moon and the stars. But how can you know if they're really delivering on their promises?
Voyager attracted many platform users with its "100% commission-free" trading policy. Mr. Cassidy soon began to suspect Voyager had its own shady practices when he noticed its wide bid-ask spreads.
A big-ask spread is defined as the difference between the highest bid a buyer is willing to offer and the lowest bid a seller is willing to accept. Voyager's wide bid-ask spreads seemed a sure sign of hidden fees. Upon investigation, Mr. Cassidy determined his suspicions had weight and reached out to attorneys for legal help.
The class action suit further claimed that Voyager takes advantage of "their customers' naivete." In particular, it alleges that the crypto broker targets "unsophisticated investors with false and misleading promises of reaping large profits in the cryptocurrency market."
- Plaintiff says Voyager built hidden fees into crypto trades
- Damages sought could exceed $1 billion, cites expert analysis
Company has completed over 36 million consumer crypto transactions and taken in over $5.5 billion in total net new retail deposits since inception as of March 31, 2022
The lawsuit, filed on behalf of Florida resident Mark Cassidy, alleges that while Voyager claims to be a commission-free platform for users, it employs various methods to charge secret commissions on all its trades, including by keeping the spread (or the difference between the “bid” and “ask” price) intentionally wide.
The allegations in a class action lawsuit against Voyager Digital claim the cryptocurrency company sold unregistered securities in the form of interest-earning crypto accounts.
The plaintiff filed his Amended Complaint with additional expert support to, among other things, include allegations Voyager engaged in the unlawful offer and sale of unregistered securities in violation of Sections 5(a) and 5(c) of the Securities Act of 1933 by selling EPAs to persons or entities in the United States on or after December 24, 2020. Any member of this putative class may move within 60 days of this publication to seek to serve as a lead plaintiff.
Voyager is, first and foremost, focused on advocating for the crypto consumer. And even amid this inevitable period of regulatory uncertainty, we have not seen any material impacts on our business. We continue to see healthy growth in net new dollar and crypto deposits as well as increased customer engagement on the platform. It is an exciting time for crypto, and I couldn't be more optimistic about our company and our future," said Steve Ehrlich, Voyager's CEO and co-founder.
Cassidy plans to represent a nationwide class and Florida subclass of investors who used Voyager’s trading platform to make cryptocurrency trades.
Voyager’s stock rose on Oct. 28 2021, to around $17 per share, today it was trading at 15 cents.
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