The Federal Trade Commission (FTC) announced it has reached a settlement with the bankrupt crypto company Voyager over the company’s alleged deceptive crypto marketing practices. Specifically, the FTC’s complaint alleges that from at least 2018 until its declaration of bankruptcy in July 2022, Voyager enticed consumers with promises that their deposits were insured by the Federal Deposit Insurance Corporation (FDIC) and were “safe.” However, consumers’ deposits with Voyager were not eligible for FDIC insurance and were not protected in the event that Voyager failed.

Several high profile bankruptcies have occurred in recent years. Most would consider a bankruptcy proceeding a last resort. But some, seeking to expunge a debt, have contemplated that bankruptcy may be a safe way to avoid the long-arm of the law. The Federal Trade Commission, however, has taken great steps to ensure that an FTC judgment firmly stays on a wrongdoer’s balance sheet.