Voyager Digital Ltd., a crypto brokerage firm, had liquidated around fifty-six million dollars’ worth of Shiba Inu, ETH, and other ERC-20 tokens. This report came after the company faced technical issues with its trading platform that resulted in many users experiencing difficulty accessing their accounts and making transactions.
According to a statement issued by Voyager, the decision to liquidate the tokens was made to ensure the safety and security of its customers’ assets during the ongoing technical difficulties. In addition, the company stated that it would refund any losses incurred by customers due to the liquidation process.
The liquidation has caused concern among Voyager users, who have questioned the company’s risk management and trading practices. In addition, some have criticized the decision to sell off the assets, arguing that it was unnecessary and may have caused unnecessary losses.
However, Voyager has defended its activities, stating that the decision to liquidate the tokens was made in the interest of its users and was necessary to mitigate any potential risks to their assets.
The incident highlights crypto brokerage firms’ challenges in managing and safeguarding customer assets, particularly during high market volatility or technical difficulties. It also underscores the importance of risk management and effective communication with customers in the crypto industry.
Overall, the liquidation of fifty-six million dollars’ worth of Shiba Inu, ETH, and other ERC-20 tokens by Voyager Digital Ltd. has raised concerns among some users and highlighted the challenges of managing customer assets in the crypto industry.
The U.S. Department of Justice has challenged the acquisition of Voyager Digital’s assets by Binance.US through an appeal to a New York court order. This event occurred just one day after Judge Michael Wiles had ruled in favor of the deal between Voyager and Binance, despite opposition from the Securities Exchange Commission.
Voyager Digital filed for bankruptcy with several other cryptocurrency companies last summer. Before its insolvency, FTX had won the initial offer to purchase the failed company’s assets.
During a hearing after Voyager Digital’s collapse, the company’s lawyers stated there would be no transaction with FTX, as they believed it was evident. In December of last year, Binance.US was announced as the eventual winner of the bidding process.
CBDCs vs. Cryptocurrency
The Anti-Money Laundering Act 2002 and its accompanying guidelines serve as the main legal structure for prosecuting money laundering in India.
The Prevention of Money Laundering Amendment Rules, 2023, introduced on March 7, 2023, by the Department of Revenue under the Ministry of Finance, require reporting institutions such as banking companies, financial institutions, or intermediaries to disclose beneficial owners along with the current ‘Know Your Client’ requirements.
This action will be done through documents like registration certificates and Permanent Account Numbers PAN. The new rules aim to increase transparency and accountability in financial transactions and combat money laundering activities in India.
The recently implemented regulations have expanded the scope of the anti-money laundering law to include virtual currencies and digital assets. As a result, companies operating crypto exchanges and intermediaries dealing with virtual digital assets must conduct ‘know your client’ procedures on their clients and platform users.
Under the new regulations, any organization that handles virtual digital assets will now be classified as a reporting institution under the Anti-Money Laundering Act.