The Commodity Futures Trading Commission charged former Voyager Digital CEO Stephen Ehrlich on Thursday with fraud and registration failures.

Separately, the Federal Trade Commission reached a $1.65 billion settlement Thursday with Voyager, permanently banning it from handling consumer assets.

The judgment will be suspended to allow Voyager to return the remaining assets to customers in its ongoing bankruptcy proceedings.

The FTC also sued Ehrlich and his wife, Francine Ehrlich, for claiming that customer accounts were “safe” and insured by the Federal Deposit Insurance Corp.

Ehrlich has not agreed to a settlement and the case against him will move forward in federal court, the FTC said.

Ehrlich said he was “outraged and deeply dismayed” by the allegations from the CFTC and FTC and that he was being used as “scapegoat for the bad actions of others,” according to a statement seen by Bloomberg. 

“I am profoundly upset by the losses suffered by Voyager’s customers and creditors due to the conduct of others in the crypto industry,” Ehrlich said.

Ehrlich and Voyager’s claim that the platform was a “safe haven” for customers to earn high-yield returns was false, the CFTC said.

“This is yet another CFTC action seeking to hold accountable a chief executive officer for his role in the fraudulent operation of a digital asset platform,” Ian McGinley, the agency’s director of enforcement, said in a prepared statement.

“Ehrlich and Voyager lied to Voyager customers. While representing they would treat customers’ digital asset commodities safely and responsibly, behind the scenes, they took shockingly reckless risks with their customers’ assets, leading to Voyager’s bankruptcy and huge customer losses,” McGinley said. “When their business began to collapse, they continued lying to their customers, concealing Voyager’s true financial health. Amplifying their fraud, Ehrlich and Voyager broke their trust with customers while acting in capacities that required CFTC registration, which they failed to obtain.”

CFTC Commissioner Kristin Johnson called Voyager “no better than a house of cards” in a statement Thursday. But not every commissioner agreed with the agency’s actions.

CFTC Commissioner Caroline Pham took issue that the regulator faulted Voyager and Ehrlich for not registering as a “commodity pool operator” because of the way in which digital assets were transferred to third parties as “loans.”  

“I caution that the CFTC’s interpretation of a commodity pool operator in this enforcement action would seem to include commonplace lending activity — like taking deposits and providing loans,” Pham wrote in a statement Thursday. “Such an interpretation is an overreach beyond our statutory authority and would disrupt well-established legal and regulatory frameworks for lending to institutions and consumer finance.”

The CFTC filed the complaint in the U.S. District Court for the Southern District of New York, the same district where former FTX CEO Sam Bankman-Fried is standing trial for alleged fraud.

FTX made a bid to buy Voyager in September 2022 following Voyager’s bankruptcy. The deal fell through following FTX’s own bankruptcy filing, and a future deal with Binance.US turned out to be doomed as well. Following Binance.US’s termination of its planned Voyager acquisition, Voyager said it would proceed to return crypto and cash directly to customers through the Voyager platform.

A representative for Voyager did not comment to Bloomberg or Reuters.