New Jersey’s Bureau of Securities instructed the cryptocurrency platform to stop the sales of securities in the form of "unregistered interest-bearing accounts."
Crypto staking platforms have been under a lot of regulatory scrutinies due to their services of high-yield savings accounts that offer a significantly higher interest rate than traditional financial institutions.
Voyager Digital offers from 1% to 9% interest rates, which are some of the highest on the market. However, the NJ Department of Law & Public Safety is attempting to crack down on these services as they fall under "unregistered securities."
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According to the report by New Jersey’s Office of Attorney General (NJOAG), Voyager Digital has repeatedly violated the Securities Law that prohibits crypto platforms from offering "income-generating activities" like financing and staking services through unregistered securities.
The Bureau highlights that Voyager Digital’s high-yield interest services are not formally registered with the regulatory authorities, and are not insured, nor under protection from financial fraud with government agencies like the SIPC, FDIC, and the NCUA.
Acting Director of the Division of Consumer Affairs Sean P. Neafsey pinpointed the reasoning behind the investigation of Voyager Digital:
"The rules are clear: anyone selling securities in New Jersey must comply with the State’s securities laws. Our Bureau of Securities will continue to protect investors by monitoring the marketplace to ensure everyone is following the rules, especially when it comes to the ever-evolving cryptocurrency market."
Likewise, Amy G. Kopleton, who is the Acting Chef at the Bureau, argued that while crypto platforms like Voyager Digital may work in the same way as ordinary financial service providers, they do not ensure protection and "regulatory oversight" which puts investors at risk.
At the moment, there is approximately $5B worth of cryptocurrencies deployed in Voyager Digital’s earning programs.
Back in February, BlockFi was under the microscope of the Securities and Exchange Commission (SEC) due to its high-yield bearing services. The platform settled for a $100M fine and continued its staking program.