Voyager’s Reward Program Lost $58M in 2022: Court Filing

Voyager’s rewards program, a part of which was once the target of a state regulator investigation, was run at a loss to the company almost every month since its inception.

The rewards program lost over $13 million during the first three months of 2022 and in total lost $58 million in the year, according to the filings.

Voyager executives voiced concerns about the significant loss in providing users high yield as part of its rewards program, according to court filings published late Tuesday.

“[I’m] trying to talk to Steve Ehrlich [Voyager’s co-founder/CEO] into taking BTC down to 4%,” Evan Psaropoulos, Chief Commercial Officer at Voyager is quoted as saying in the filings. “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.”

The executives said they viewed the reward program cost as a marketing expense necessary for user acquisition, the filings say. In November 2021, they cited the reward and loyalty program as the mechanism that pushed them over the 1 million account mark.

Court documents do not mention the other parts of the rewards program, aside from the high-yield accounts. Yields on Voyager were as high as 12% on certain digital assets.

Facing the significant cost of running the program, Voyager implemented a lending program to fund it. Counterparties for Voyager’s lending program included Three Arrows Capital, which presented the company with a one-page signed memo to show its net asset value (NAV).

In March, a number of U.S. states began investigating the rewards program, accusing it of being an unregistered security. Joseph Borg, Director of the Alabama Securities Commission, told CoinDesk in an earlier interview that crypto interest accounts should be subject to the same regulatory scrutiny applied to other interest-bearing investment products.

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