The Texas State Securities Board is investigating both SBF and FTX US. They are accused of offering unregistered securities products in the U.S. through the yield-bearing service, according to a recent court filing.
TSSB Director of Enforcement Joseph Rotunda disclosed the allegation in a filing to the bankruptcy court overseeing the potential sale of Voyager Digital’s assets to the FTX crypto exchange, FTX US’ parent.
He stated that FTX US may be violating state law governing the registration and sale of securities products because it is currently offering a yield-bearing product to the U.S. customers.
The filing was added to the court docket on Friday and was submitted in advance of a hearing to finalize the potential sale of Voyager’s assets to FTX.
In the filing, Rotunda stated, “I am aware that FTX Trading, along with West Realm Shires Services Inc. dba FTX US (‘FTX US’), may be offering unregistered securities in the form of yield-bearing accounts to residents of the United States.”
He further added, “These products appear similar to the yield-bearing depository accounts offered by Voyager Digital LTD et al., and the Enforcement Division is now investigating FTX Trading, FTX US, and their principals, including Sam Bankman-Fried.”
He went on to explain that he was able to download the FTX Trading app on his smartphone and create a yield-bearing account using his own name and Austin, Texas address. He was able to do so despite the company’s terms and conditions saying FTX will not provide such services to the U.S. residents.
The FTX Trading App showed that he was earning yield on the ETH. The yield was valued at 8 percent APR. Based upon his earning of yield and an ongoing investigation by the Enforcement Division of the Texas State Securities Board, the yield program appears to be an investment contract.
Rotunda concluded that FTX US should not be permitted to purchase the assets of the debtor unless or until the Securities Commissioner has an opportunity to determine whether FTX US is complying with the law.
Also Read: FTX US to Acquire Voyager Assets after its Winning Bid in the Auction
