Voyager Digital: The Broker That Bet It All on 3AC

Publicly traded. 'FDIC insured.' Lent $650M to one hedge fund. It wasn't insured. The hedge fund blew up.

Voyager Digital

Voyager Digital was a publicly traded crypto brokerage that positioned itself as the mainstream-friendly option. Listed on the Toronto Stock Exchange. Regulated. Clean app interface. CEO Stephen Ehrlich appeared on CNBC and Bloomberg regularly. He looked like a banker. He talked like a banker. He was not operating like a banker.

Voyager's big bet was a $650 million loan to Three Arrows Capital (3AC), the hedge fund run by Su Zhu and Kyle Davies that was leveraged to the teeth on the "supercycle" thesis. When LUNA collapsed in May 2022, 3AC could not repay. Voyager had lent almost all of its customer deposits to a single counterparty with no meaningful collateral. One loan. One hedge fund. $650 million. Gone.

On July 1, 2022, Voyager suspended withdrawals. Three days later, it filed for Chapter 11 bankruptcy. 3.5 million users lost access to their funds. The platform had $3.5 billion in liabilities and nowhere near enough assets to cover them.

The FDIC lie was the cruelest part. Ehrlich had told customers their deposits were FDIC insured. They were not. The FDIC itself issued a cease-and-desist order against Voyager for misrepresenting deposit insurance. Customers who thought their money was as safe as a bank account discovered it was as safe as a loan to a leveraged gambler in Singapore.

Voyager's bankruptcy became a bidding war. FTX initially won the bid to acquire Voyager's assets - then FTX itself collapsed five months later. Binance.US eventually stepped in, but that deal also fell apart amid regulatory pressure on Binance.

The legal consequences for Ehrlich were remarkably lenient. In June 2025, the FTC settled with Ehrlich and his wife Francine for $2.8 million and imposed a permanent ban on marketing or selling crypto products. In September 2025, the CFTC settled separately - $750,000 in disgorgement to customers plus a three-year trading ban. Total financial penalty: $3.55 million. For losing $3.5 billion. That is 0.1% of the damage.

No prison time. No criminal charges. Ehrlich walked away banned from the industry and lighter by $3.55 million. Mark Cuban, Rob Gronkowski, and other celebrity endorsers were named in a class action lawsuit filed by investors.

Voyager proved that being publicly traded and appearing regulated means absolutely nothing if the people running the company are lending your money to a single overleveraged hedge fund and lying about deposit insurance.