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I have a hard time imagining a jury coming to the conclusion that this phrasing (still on their site) isn't intentionally misleading.

notch656a 4y ago
USDC is supposedly USD backed, so a reasonable person would presume someone who advertises FDIC insurance of cash would assume the USDC underlying USD is backed by FDIC. Seems like pretty clear fraud to me if the USDC isn't actually FDIC insured. If they meant only some of the cash (non USDC backed) was insured they should have said that.
- jcranmer 4y ago
  > USDC is supposedly USD backed, so a reasonable person would presume someone who advertises FDIC insurance of cash would assume the USDC underlying USD is backed by FDIC. That is not how FDIC insurance works. If you don't hold USD, you don't enjoy any FDIC insurance, period. Not your USD, not your insurance. > If they meant only some of the cash (non USDC backed) was insured they should have said that. Judging from the text at the top of this thread, this is precisely what they said, so it's not fradulent. At no point are they saying that they offer accounts protected by FDIC insurance--instead, they're saying that their USD reserves are in FDIC-insured accounts. So no misrepresentation going on.
  - notch656a 4y ago
    >That is not how FDIC insurance works. Agreed but I'd say this was misrepresented as they say USD is backed by FDIC. See below. >If you don't hold USD, you don't enjoy any FDIC insurance, period. Not your USD, not your insurance. USDC is USD backed, so one would conclude you actually do "hold" USD through the USDC security. Thus you are tricked into believing you have FDIC insurance on the USD secured by the USDC. "period." >Judging from the text at the top of this thread, this is precisely what they said, so it's not fradulent. What was said on the thread is that USD is FDIC backed. USDC is secured by USD, so one would reasonably conclude their USD underlying the USDC is FDIC insured (in fact it is not). >At no point are they saying that they offer accounts protected by FDIC insurance--instead, they're saying that their USD reserves are in FDIC-insured accounts. So no misrepresentation going on. But the USD reserves of the USDC __aren't_ completely FDIC insured so there is misrepresentation going on. It's pretty evident to me here there was a slight of hand here that was intentional. The wording was intentional chosen to weasel out of the FDIC backing while leading the customer on to believe it is FDIC backed. A pretty common reasonable interpretation of the customer I think is to say "I own USDC which has underlying USD, and Voyager says USD itself is FDIC backed thus the full value of the USDC is insured." If that wasn't the case it seems pretty pointless to couple their twitter advertisements that advertise FDIC insurance and then goad you on to deposit USDC. The coupling was definitely intentional.
    - jcranmer 4y ago
      > USDC is USD backed, so one would conclude you actually do "hold" USD through the USDC security. I mean, I can see the thought pattern behind this, but it's wrong. No court will uphold this interpretation. You don't hold the USD, you hold USDC, so absent the USDC financial instrument itself having contractual obligations (which it doesn't), the underlying assets matters not one whit. > It's pretty evident to me here there was a slight of hand here that was intentional. The wording was intentional chosen to weasel out of the FDIC backing while leading the customer on to believe it is FDIC backed. Oh, I'm certain the misleading was intentional. But that doesn't mean it was fradulent. At no point did they make a false statement--instead, you made an incorrect inference. You might have a cognizable false advertising claim, but nothing I've seen would lead me to conclude that a fraud claim could be upheld.
  - InefficientRed 4y ago
    my prediction is that the wording on the website and the overall context is too cute by a half for a jury of peers.
lmm 4y ago
Sure, but by that time there will be 0 assets to pay out and winning a judgement against them won't help you.
- InefficientRed 4y ago
  I had prosecution in mind.

notch656a 4y ago

USDC is supposedly USD backed, so a reasonable person would presume someone who advertises FDIC insurance of cash would assume the USDC underlying USD is backed by FDIC. Seems like pretty clear fraud to me if the USDC isn't actually FDIC insured. If they meant only some of the cash (non USDC backed) was insured they should have said that.

jcranmer 4y ago
> USDC is supposedly USD backed, so a reasonable person would presume someone who advertises FDIC insurance of cash would assume the USDC underlying USD is backed by FDIC. That is not how FDIC insurance works. If you don't hold USD, you don't enjoy any FDIC insurance, period. Not your USD, not your insurance. > If they meant only some of the cash (non USDC backed) was insured they should have said that. Judging from the text at the top of this thread, this is precisely what they said, so it's not fradulent. At no point are they saying that they offer accounts protected by FDIC insurance--instead, they're saying that their USD reserves are in FDIC-insured accounts. So no misrepresentation going on.
- notch656a 4y ago
  >That is not how FDIC insurance works. Agreed but I'd say this was misrepresented as they say USD is backed by FDIC. See below. >If you don't hold USD, you don't enjoy any FDIC insurance, period. Not your USD, not your insurance. USDC is USD backed, so one would conclude you actually do "hold" USD through the USDC security. Thus you are tricked into believing you have FDIC insurance on the USD secured by the USDC. "period." >Judging from the text at the top of this thread, this is precisely what they said, so it's not fradulent. What was said on the thread is that USD is FDIC backed. USDC is secured by USD, so one would reasonably conclude their USD underlying the USDC is FDIC insured (in fact it is not). >At no point are they saying that they offer accounts protected by FDIC insurance--instead, they're saying that their USD reserves are in FDIC-insured accounts. So no misrepresentation going on. But the USD reserves of the USDC __aren't_ completely FDIC insured so there is misrepresentation going on. It's pretty evident to me here there was a slight of hand here that was intentional. The wording was intentional chosen to weasel out of the FDIC backing while leading the customer on to believe it is FDIC backed. A pretty common reasonable interpretation of the customer I think is to say "I own USDC which has underlying USD, and Voyager says USD itself is FDIC backed thus the full value of the USDC is insured." If that wasn't the case it seems pretty pointless to couple their twitter advertisements that advertise FDIC insurance and then goad you on to deposit USDC. The coupling was definitely intentional.
  - jcranmer 4y ago
    > USDC is USD backed, so one would conclude you actually do "hold" USD through the USDC security. I mean, I can see the thought pattern behind this, but it's wrong. No court will uphold this interpretation. You don't hold the USD, you hold USDC, so absent the USDC financial instrument itself having contractual obligations (which it doesn't), the underlying assets matters not one whit. > It's pretty evident to me here there was a slight of hand here that was intentional. The wording was intentional chosen to weasel out of the FDIC backing while leading the customer on to believe it is FDIC backed. Oh, I'm certain the misleading was intentional. But that doesn't mean it was fradulent. At no point did they make a false statement--instead, you made an incorrect inference. You might have a cognizable false advertising claim, but nothing I've seen would lead me to conclude that a fraud claim could be upheld.
- InefficientRed 4y ago
  my prediction is that the wording on the website and the overall context is too cute by a half for a jury of peers.

lmm 4y ago

Sure, but by that time there will be 0 assets to pay out and winning a judgement against them won't help you.

InefficientRed 4y ago
I had prosecution in mind.