Why Is Voyager Digital (VYGVF) Stock Down Today?

Today, one of the biggest losers of the market is Voyager Digital (OTCMKTS:VYGVF) stock. Shares of this digital crypto platform have certainly been volatile of late. However, today’s downside move of more than 23% in VYGVF is very notable.

An image of a Bitcoin token standing upright on a rising graph, a calculator and pen in the background
Source: Sebastian Duda / Shutterstock

Voyager Digital is an interesting company to assess. Similar to other crypto platforms, it has looked to increase its presence in the crypto market via various products. According to Yahoo! Finance, the platform enables users to buy, sell and trade a variety of crypto assets “across multiple centralized marketplaces in one account.” It sounds like a good business model, for those bullish on the crypto sector.

Of course, though, the crypto sector itself is volatile. In recent months, VYGVF stock has generally followed crypto prices lower. These macro headwinds have been hard to escape. And, by and large, the same concerns have hit the entire sector.

That said, there are also some company-specific problems surfacing with Voyager Digital today. So, let’s dive into what’s driving shares of this crypto company downward.

VYGVF Stock Drops on Regulatory Crackdown

Today, CoinDesk reported that regulators across “at least seven U.S. states” are probing Voyager Digital. In particular, regulators have started to look into the company’s interest-bearing crypto accounts. Their concern? Whether Voyager’s Earn Program could be involved in selling unregistered securities.

Other cryptocurrencies and crypto platforms have come under fire with similar allegations. The question of whether crypto is a security or not is something still being debated in the courts. Right now, there’s no set precedent on this front.

However, regulators looking to safeguard investors currently appear to have no choice but to investigate the matter. Other high-profile crackdowns — such as the one that saw BlockFi pay a $100 million fine — do give investors some idea of where this ordeal could settle.

For now, Voyager claims it’s aware of the cease and desist order and is working with regulators to “clarify the statements it believes are inaccurate.” Looking forward, it appears the order will affect Voyager’s ability to offer new accounts and expand its growing Earn Program. Accordingly, investors are now selling VYGVF stock heavily. Today, trading volume surpassed 2.8 million. The stock’s three-month average volume is around 578,000 shares.

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Read More:Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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