The Houston Texans – a professional American football team – have entered into an exclusive partnership with the Houston-based cryptocurrency company, BitWallet. The partnership will allow the team to begin accepting crypto as payment for single-game NFL suites. Effective immediately, BitWallet will act as an intermediary for crypto payments to the Texans. This allows digital assets to immediately be converted into U.S. dollars. The first to purchase a suite using digital currency was EWR Digital, a digital marketing agency. "We…
Voyager Digital – a cryptocurrency broker offering simultaneous access to cryptocurrencies on multiple exchanges – has run into some legal trouble. It is now facing a lawsuit alleging that it misled customers by charging hidden fees on transactions. However, Voyager said the accusations are bunk and plan to deal with the matter “through the appropriate legal channels.
Lawsuit Against Voyager
As reported by Bloomberg, it filed the lawsuit in federal court in Miami on Christmas Eve. It alleges that Voyager has integrated “secret commissions” into the process of every trade on their platform. This would contradict the “commission-free” trade promise that the company features on its website. Granted, the company does clarify that “other fees may apply”.
The lawsuit claims that these commissions exceed those disclosed by competitor platforms. Mark Cassidy – the plaintiff in the case – told Bloomberg that the company has been “ripping people off small pieces at a time”.
Cassidy said that he began his crypto trading with Robinhood but left the platform due to SEC allegations against it. Robinhood’s lawsuit alleges that it failed to disclose having sold its stock orders to Wall Street trading firms. The commission claims that this made clients trade at bargain-basement prices to other brokers. The broker agreed to settle the lawsuit by paying a $65 million fine in December 2020.
After reading some client reviews, the plaintiff moved over to Voyager shortly after but began to suspect hidden fees in their services. The experience turned him away from crypto trading entirely.
Two experts were willing to corroborate his claims as well. Richard Sanders – lead investigator at Cypherblade, and Stephen Castell – chairman of Castell Consulting – have conducted preliminary analyses on the matter. Castell predicted that over $1 billion in damages might have been dealt with by the platform’s users.
“What these experts have shown us is that Voyager is set up, in a way, like a carnival–every consumer is going to lose,” said Adam Moskowitz, filer of the lawsuit.
Why Regulations Matter
Both Voyager and Robinhood‘s lawsuits give credit to the more crypto-hawkish politicians on Capitol Hill. Unfortunately, while the industry presents tremendous opportunity, the lack of adequate regulations put investors at risk of unforeseen financial damages and scams.
Voyager’s Chief Communications Officer, Michael Legg, completely denies the allegations. He said they’re “absolutely spurious and without any merit, whatsoever”.