The United States Court of Appeals for the Second Circuit ruled on October 9, 2026, that Metropolitan Commercial Bank (MCB) did not commit fraud against former customers of Voyager Digital, LLC. The court upheld a lower court's decision to dismiss the case brought by Michael Wyse, the Plan Administrator for Voyager, which filed for bankruptcy in July 2022. This ruling affects thousands of former customers of Voyager who alleged fraud and misconduct against the bank.
The case, Wyse v. Metropolitan Commercial Bank, No. 25-2106, centers around claims made by Wyse on behalf of 31,867 customers who used Voyager's cryptocurrency brokerage platform. These customers claimed that MCB directly participated in or aided Voyager's fraudulent activities. The court's decision is significant as it clarifies the standards required to prove fraud and vicarious liability in cases involving financial institutions.
In 2022, Voyager Digital, a cryptocurrency brokerage, filed for bankruptcy, leaving many customers seeking restitution for their losses. Michael Wyse, as the Plan Administrator, took legal action against MCB, alleging that the bank was complicit in Voyager's fraudulent practices. The complaint included claims of common law fraud, statutory consumer fraud, and statutory securities fraud. The district court dismissed the case, stating that Wyse failed to provide sufficient evidence that MCB had actual knowledge of Voyager's alleged fraud.
The court filing detailed that the Administrator's complaint lacked the necessary facts to support the claims against MCB. The court emphasized that to prove fraud, the plaintiff must demonstrate that the defendant had actual knowledge of the fraudulent conduct. The court noted that the Administrator's general assertions about MCB's involvement were insufficient to meet the legal standard required for fraud claims.
In its ruling, the court stated, "The Administrator failed to plead that MCB had actual knowledge of Voyager’s fraud," and emphasized that the allegations did not provide enough detail to support claims of fraud or vicarious liability. The judges on the panel included Richard C. Wesley, Richard J. Sullivan, and Steven J. Menashi. They agreed with the lower court's assessment that the complaint did not meet the heightened pleading requirements set forth in Federal Rule of Civil Procedure 9(b).
The court also highlighted that although the Administrator sought to apply a more lenient standard for pleading fraud due to the bankruptcy context, he did not demonstrate that he lacked access to the necessary information. The ruling pointed out that the Administrator had opportunities to gather facts from both the Assignors and MCB but failed to do so adequately.
Furthermore, the court concluded that the Administrator did not establish that MCB was vicariously liable for Voyager’s actions. The court found that the agreement between MCB and Voyager explicitly stated that they were independent contractors and did not create a broad agency relationship. The court noted, "The plain text of that Agreement expressly disclaims such a relationship," reinforcing the idea that MCB could not be held responsible for Voyager's alleged misconduct.
This ruling has significant implications for the thousands of former Voyager customers who were hoping to recover their losses through the lawsuit against MCB. The court's decision clarifies the legal standards for proving fraud and vicarious liability, particularly in cases involving financial institutions and bankruptcy. It underscores the importance of providing detailed evidence when alleging fraud and the challenges faced by plaintiffs in such cases.
Looking ahead, the ruling effectively ends the Administrator's claims against MCB unless there are grounds for further appeal. The court's decision does not appear to leave room for an appeal on the merits, as it affirmed the lower court's ruling in its entirety. Details regarding any potential related cases or appeals were not available in the court filing.