Texas is investigating FTX, FTX.US, and Sam Bankman-Fried for selling unregistered securities. The investigation was revealed in a new filing as part of the ongoing Voyager bankruptcy hearing during which FTX has placed a bid for the lending platform.
Texas State Securities Board Director of Enforcement Division Joseph Rotunda revealed that he was able to easily download FTX’s application and begin earning yield on his ether deposit while inputting his accurate KYC information.
Joseph also emphasized that FTX US isn’t registered as a money transmitter or a securities dealer in Texas.
This ongoing investigation is likely going to complicate Bankman-Fried’s ongoing efforts to acquire all failing cryptocurrency lending platforms, especially with the filing specifically requesting 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.”
The Securities and Exchange Commission (SEC) has also been actively working against crypto yield programs, dissuading Coinbase from offering its Earn product. It’s also supposedly been probing other cryptocurrency lenders, including Gemini and Celsius.
A previous Freedom of Information Act request to the SEC from Protos requesting documents related to investigations of FTX US for selling unregistered securities was denied, citing an exemption protecting from disclosure records compiled for law enforcement.