Internal red-flag emails still fell short of proving actual knowledge
The Second Circuit shut the door on a sweeping fraud case against Metropolitan Commercial Bank tied to the collapse of crypto platform Voyager Digital.
In a summary order dated October 9, 2026, a three-judge panel affirmed the dismissal of all 53 claims brought by the plan administrator winding down Voyager’s bankruptcy estate. The claims - common law fraud, consumer fraud, securities fraud, and unregistered securities violations - rested on one theory: that MCB either directly participated in or aided Voyager’s alleged fraud, or was vicariously liable for it.
Neither argument held up.
Voyager operated a cryptocurrency brokerage platform until it filed for bankruptcy in July 2022. The administrator brought the action as assignee of claims from 31,867 former customers. At the center of the dispute was a for-the-benefit-of account agreement between Voyager and MCB governing their banking relationship.
The fraud claims turned on whether MCB had actual knowledge of Voyager’s alleged misconduct. The administrator pointed to the bank’s close contact with Voyager, its involvement in Voyager’s money transmitter license efforts, an internal email where an MCB executive flagged draft language about FDIC insurance as potentially “misleading,” and emails in which MCB’s CEO observed that Voyager’s “lending strategy [was] under pressure.”
None of it got there. The FDIC email concerned draft language for a future debit cardholder agreement - not a public statement Voyager had already made. The internal emails, the court said, showed MCB recognized business risk - not that it knew Voyager was lying about its platform being safe.
The administrator also pushed for a relaxed pleading standard sometimes available to bankruptcy trustees who lack direct access to the facts. The court rejected that too, noting the administrator had authority under the bankruptcy plan to examine witnesses, access to Voyager’s internal documents, and access to the 31,867 former customers themselves. He acknowledged he could have followed up but called it “inefficient.”
That did not persuade the panel.
On vicarious liability, the court turned to the FBO agreement’s plain language. Section 12.6 stated the bank and Voyager were “independent contractors.” The agreement’s scope was limited to MCB’s “formally accepted and approved Program(s)” - specifically, the FBO account for “cash management and payment concentration services.”
For banking professionals managing fintech partnerships, the decision draws a sharp line: awareness that a partner carries risk is not actual knowledge of fraud, and a tightly drafted contract can mean the difference between liability and dismissal.
