The Texas State Securities Board is investigating FTX US and its founder Sam Bankman-Fried for possibly offering unregistered securities.
The investigation was revealed in a filing by board enforcement director Joe Rotunda, who filed it as part of Voyager Digital’s bankruptcy proceedings, Barrons reported Monday.
JUST IN: 🇺🇸 The Texas Securities and Exchange Commission is launching an investigation into FTX US and CEO Sam Bankman-Fried.
— Watcher.Guru (@WatcherGuru) October 17, 2022
According to Rotunda, the board is investigating certain accounts offered by FTX US. These accounts pay investors a return in exchange for depositing their cryptocurrencies with the company. People often refer to these types of accounts as “crypto yield farming”.
Texas and other state securities regulators have hounded Voyager and other crypto companies for offering similar crypto yield farming products, which they say are unregistered securities that fail to disclose their risks to investors. In some cases, these products have been found to be fraudulent.
Source: Reuters, CNBC
In September, FTX won a bid to buy Voyager’s assets out of bankruptcy in a $1.4 billion deal. However, Rotunda said securities regulators should not allow the company to buy the assets until they can determine compliance with the law.
It is currently unclear whether FTX US or Bankman-Fried broke any laws. The investigation is ongoing and no formal charges have been filed.
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