Voyager Digital Representations on Cryptocurrency Trading Class Action

Voyager Digital Ltd. and Voyager Digital, LLC offer a “multi-billion-dollar mobile application cryptocurrency investment service” that permits members of the general public to buy and sell cryptocurrencies. The complaint alleges that the service is aimed at investors who are young and inexperienced and that some of its promises are simply not true.

The Nationwide Class for this action is all persons in the US who, within the applicable limitations period, used the Voyager Defendants’ trading platform to place cryptocurrency investment orders. A Florida Subclass has also been defined, for those in the above class in Florida.

The complaint alleges, “The Voyager Defendants specifically target young and inexperienced investors, who are certainly new to cryptocurrency trading and mainly utilize mobile apps (rather than any sophisticated software) for trading, through the use of youth-forward marketing…”

Among the representations Voyager makes to attract customers, the complaint cites “uniform representations that the Deceptive Voyager Platform is ‘100% Commission-Free,’ while also assuring customers that they will receive the best possible price on cryptocurrency trades.” In fact, the complaint alleges that both cannot be true.

The complaint alleges that the platform takes advantage of “their customers’ naivete by using their proprietary system to throw up smoke screens, including ‘Smart Order Routing,’ the ‘Voyager Pricing Engine,’ and the ‘Proprietary Fills Algorithm,’” Voyager “are able to collect on average what is likely to be more in hidden commissions than their competitors collect from their disclosed commissions.”

The claim that Voyager is “100% Commission-Free” is false, the complaint claims: “For example, the ‘spread’ (i.e., the difference between the ‘Bid Price’ and ‘Ask Price’ on a given cryptocurrency) is kept intentionally wide on all cryptocurrencies listed throughout the Voyager Platform.” Then, the complaint alleges, “the Voyager Defendants’ systems will automatically execute market orders at the highest end of the spread, from which they pocket secret commissions.” These hidden commissions, the complaint alleges, may be higher than the fees and commissions charged by its competitors.

The complaint further alleges, “Not only does Voyager fail to deliver on their advertising promise of ‘Better Pricing On Trades,’ they charge their users the highest premium on trades across all competitors.”

To support its allegations, the complaint draws on preliminary expert reports from two experts on blockchain and cryptocurrency, Richard A. Sanders and Dr. Stephen Peter Castell.

The Sanders report concludes by saying, in part, “Voyager has fraudulently conducted business by making false claims, utilizing misleading marketing, and obscuring the truth behind what Voyager does with customer’s funds, and what fees users are charged.”

Article Type: Lawsuit
Topic: Investments
Tags: Brokerage, Cryptocurrency, Deceptive Advertising, Investments