Sam Bankman-Fried in a Tussle With Texas Officials Over Unregistered Securities
Texas officials are looking into whether or not the spend-thrift entrepreneur Sam Bankman-Fried and the cryptocurrency exchange FTX is marketing unregistered securities products.
According to the notice of hearing, the business was accused of breaking any laws by providing yield-bearing depository accounts that were classified as securities in Texas. It also states that FTX US is not registered with the Texas Department of Banking as a money transmitter or in any other capacity.
One of the three biggest crypto-lending companies, Voyager Platform, stopped operating for its customers and filed for bankruptcy in the US. Voyager Digital was negatively damaged by the fall of the cryptocurrency market and was compelled to file for bankruptcy.
FTX and SBF are both the subject of an investigation, according to Joseph Rotunda, director of the Texas State Securities Board’s Enforcement Division. The officer made the remarks in regard to the lawsuit that was brought by the Enforcement Division against Voyager Digital on April 12, 2022.
“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,” read the document.
After a terrible summer that left major crypto firms unable to reimburse their users, Bankman-Fried told Forbes in an interview that he was investing hundreds of millions of dollars in struggling exchanges to keep them viable.
According to reports, FTX purchased the assets of bankrupt Voyager for $1.42 billion at an auction last month. Earlier, the business disclosed it owned a 7.6% investment in Robinhood, whose cryptocurrency division recently laid off 23% of its staff.
The Enforcement Division and Voyager Digital are now engaged in court proceedings. The platform is charged with selling unregistered securities to American citizens by the regulator and its enforcement division.