This evening, the Federal Reserve Board and the FDIC, as banking regulators, sent out a joint press release, advising the world that they sent a joint letter to Voyager Digital today, in which they demand that Voyager “cease and desist from making false and misleading statements regarding its FDIC deposit insurance status.”

Voyager Digital is or was a crypto platform, crypto lender, and crypto broker that lured customers into depositing their crypto and fiat there, and then on July 1 suspended all withdrawals and trading, and then on July 6 filed for bankruptcy, and whoever had any money, fiat, or crypto, or whatever on the platform, is now an unsecured creditor in a bankruptcy case, and they have no idea if they will ever get any of their money, fiat, or crypto back.

Voyager is part of the now collapsing Decentralized Finance (DeFi) creature that was supposed to supersede FDIC-member banks.

It would be a total hoot if regulators actually stepped in to protect people from these kinds of outfits and from their founders and executives and all the enablers that made DeFi possible. But that’s not going to happen. Folks are going to have to learn the hard way. And after they’ve learned the hard way and got cleaned out, the regulators come in with a cease-and-desist orders, and then brag about it to let everyone know how tough they are.

Would be a Hoot If Regulators Cracked Down on Companies BEFORE They Freeze Customer Deposits & Cryptos and File for Bankruptcy | Wolf Street