Texas authorities are looking into alleged securities violation at cryptocurrency exchange FTX FTX/USD, its FTX US business and founder and CEO Sam Bankman-Fried, according to a state filing.
Authorities are looking into whether the yield-bearing accounts FTX US offers should be regarded as unregistered securities, as stated in a document relating to Voyager’s bankruptcy proceedings.
The bid to buy the firm’s assets was recently won by FTX.
“As more fully explained throughout this declaration, I am aware that FTX Trading, along with West Realm Shires Services Inc. dba FTX US may be offering unregistered securities in the form of yield-bearing accounts to residents of the United States,” Texas State Securities Board (TSSB) Director of Enforcement Joseph Rotunda wrote.
FTX Products Similar to Voyager Digital
“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 added.
Rotunda further said he downloaded the FTX software on his phone, made an account and then transferred money to that new account using both a bank transaction and an Ethereum transaction.
Furthermore, despite the company’s terms and conditions stating that FTX will not provide services to U.S. citizens, the app claimed he was qualified for a yield-bearing account.
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FTX Yield Accounts Provide Up To 8% APY On The First $10,000 Transferred
“Despite the fact I identified myself by name and address, the FTX Trading App now shows that I am earning yield on the ETH. The yield is valued at 8% APR,” he wrote.
He said it appeared to be an investment contract, which in Texas would be governed as security.
The state does not have FTX US’s yield program registered.
In a statement shared with several media outlets, an FTX spokeswoman claimed that the company was negotiating with the TSSB.
“We have an active application for a license which has been pending and believe we are operating fully within the bounds of what we can do in the interim. We look forward to continue working with Texas,” the spokesperson said.
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