Voyager Digital has made an embarrassing and costly mistake with its rewards program, according to a court filing released late Tuesday.

The program, which draws in users with its high yield rewards, has lost over $13 million in the first three months of 2022 and over $58 million for the whole year, the document states.

"[I’m] trying to talk to Steve Ehrlich [Voyager’s co-founder and CEO] into taking BTC down to 4%,” said Voyager's Chief Commercial Officer Evan Psaropoulos. “If we want to have that rate on bitcoin, we’d have to be open to strategies beyond basic lending. Or, we have to beef up the team and onboard/lend to riskier borrowers.”

Voyager executives view the cost of this program as simply a marketing expense. In November 2021, they credited the program with helping them reach 1 million users.

Voyager also brought onboard the now-defunct crypto hedge fund Three Arrows Capital to help fund the rewards program. This move drew the attention of U.S. regulators, who accused Voyager of providing users with unregistered securities.

Key Points

  • Voyager Digital's rewards program has lost over $58 million since 2022
  • Voyager executives cite the reward program as a marketing expense
  • Voyager brought onboard the now-defunct crypto hedge fund Three Arrows Capital to help fund the rewards program
  • The move attracted the attention of U.S. regulators, who accused Voyager of providing users with unregistered securities

TL;DR

Voyager Digital's reward program has been a costly mistake since 2022, with losses of over $58 million. U.S. regulators opened an investigation into the program after it brought onboard the now-defunct crypto hedge fund Three Arrows Capital.