Robert first came across Voyager Digital in March 2020.
Like countless others, he decided to give the cryptocurrency broker a try. The platform was easy to navigate. It offered him an up to 9% annual percentage yield (APY)—much higher than a traditional savings account. It claimed to be FDIC (Federal Deposit Insurance Corporation) insured. And being a publicly traded company on the Toronto Stock Exchange, he thought, how bad could Voyager be?
Robert, who asked to be identified by only his first name for privacy reasons, ultimately invested six figures on Voyager, or 70% of his savings, he tells Fortune. Another user, who invested on Voyager for about six years and asked to remain anonymous due to safety concerns, has about $38,000 invested on the platform.
But now, both of them are unable to withdraw any of their money, as the company suspended trading on July 1 and filed for Chapter 11 bankruptcy protection late Tuesday.
Voyager also is not FDIC-insured, despite its advertisements that “In the rare event your USD funds are compromised due to the company or our banking partner’s failure, you are guaranteed a full reimbursement (up to $250,000).” Its “banking partner,” Metropolitan Commercial Bank, is FDIC insured, but Voyager is not.
Learning this, the user of six years said, was “like a kick in the stomach.”
“Every day, honestly, I cry,” Robert says. “I don’t know what to tell my wife. As partners, we decided to [invest on Voyager], but she trusted me, more than anyone else, to make the proper decision.”
Now these investors are learning how overleveraged Voyager was, and how it invested their savings in a now-defunct hedge fund that engaged in extremely risky behavior.