Billionaire Sam Bankman-Fried’s crypto exchange platform is under investigation by the securities regulator of Texas for allegedly offering unregistered seucurities in the state.
A court document related to crypto lender Voyager Digital’s bankruptcy reveals that the Texas State Securities Board’s enforcement division is investigating FTX.
[adinserter block="1"]Joseph Rotunda, the director of the board’s enforcement division, says in a declaration that he transferred Ethereum (ETH) to an FTX account and has been earning yield on it. He argues that the exchange’s yield program appears to be an investment contract.
“Based upon my 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, evidence of indebtedness and note, and as such appears to be regulated as a security in Texas as provided by Section 4001.068 of the Texas Securities Act.
At all times material to the opening of this FTX account, FTX Trading and FTX US have not been registered to offer or sell securities in Texas. FTX Trading and FTX US may therefore be violating Section 4004.051 of the Texas Securities Act.”
In late September, FTX won the auction to purchase Voyager after placing a $1.42 billion bid, though the digital asset exchange will reportedly pay just $51 million in cash for the assets, intellectual property and user base of the crypto lending platform.
Most of FTX’s bid was geared towards Voyager’s digital asset holdings, which are valued at about $1.3 billion and will reportedly be distributed to creditors proportionally.
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