Securities regulators from two US states are reportedly looking into embattled crypto brokerage firm Voyager Digital for possibly failing to disclose vital information regarding its loans and creditworthiness to its clients.
According to a new report by Bloomberg, regulation agencies from the states of Texas and Alabama are ramping up their efforts into investigating Voyager after the firm filed for Chapter 11 bankruptcy a few days ago.
The state regulators will also be looking into a freeze enacted by Voyager, which prevented clients from withdrawing their funds.
Says Joe Rotunda, Director of Enforcement at the Texas State Securities Board,
“What we’re seeing now is that a lot of these crypto lending firms may not have fully disclosed what they were doing on the backside with investors’ money, the risks associated with those types of lending practices or even the other types of transactions they are engaging in.”
Texas and Alabama join a coalition of US states looking into the crypto firms, according to the report.
Last month, regulators in five US states, including Texas and Alabama, started to probe crypto lending platform Celsius (CEL) after the firm announced it was halting all withdrawals.
Two weeks after the announcement, banking giant Goldman Sachs said they were raising $2 billion in an attempt to purchase distressed assets from Celsius in case the platform filed for bankruptcy.
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Featured Image: Shutterstock/Tithi Luadthong/Natalia Siiatovskaia
