Texas is investigating FTX US, Sam Bankman-Fried over unregistered securities offerings
Court of October 14 filing The Texas Securities Commission (TSSB) has announced that it is investigating the sale of unregistered securities by FTX.US and Sam Bankman-Fried.
Barons First report filing.
The submission was made by Joseph Rotunda, TSSB’s Director of Enforcement. He argued that the cryptocurrency exchange violated state law by offering yield products to U.S. customers. According to him, the FTX product is similar to a yielding savings account offered by bankrupt crypto lender Voyager Digital.
Rotunda wrote that the exchange’s terms of service state that it does not offer services to residents of the United States. However, he discovered that he earns around 8% of his APR on Ethereum (ETH) deposits at the company. He said:
“The Yield Program appears to be an investment contract, evidence of debt and notes, and regulated as a Texas security as defined in Section 4001.068 of the Texas Securities Act.”
He continued, “FTX Trading and FTX US may not fully disclose all known material facts.
Ability to attack clients before opening an account and earning a yield, thereby engaging in fraud or creating offers containing statements that may be materially misleading or deceptive to the public there is. “
Rotunda has declared that FTX US should not be allowed to purchase Voyager’s assets because of these securities law violations.
FTX has not responded to CryptoSlate’s request for comment at press time.
