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Sam Bankman-Fried and FTX Probed by Texas State Securities Board

Summary:
The Texas State Securities Board – the region’s securities regulators – is investigating FTX and its boss, Sam Bankman-Fried (SBF), over whether some of its crypto offerings violate state law.  As reported by Bloomberg on Monday, the regulator has taken specific issue with the company’s yield-bearing crypto accounts, which may constitute unregistered securities offerings.  As its source, Bloomberg cited an October 14th court filing in the bankruptcy of Voyager Digital – a company whose assets FTX seeks to acquire.  The Texas agency has requested that FTX not move forward with the .4 billion purchase until its investigations are complete. Within the bankruptcy documents, the regulator objected to the acquisition altogether.  “We have an active application for a license

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The Texas State Securities Board – the region’s securities regulators – is investigating FTX and its boss, Sam Bankman-Fried (SBF), over whether some of its crypto offerings violate state law. 

  • As reported by Bloomberg on Monday, the regulator has taken specific issue with the company’s yield-bearing crypto accounts, which may constitute unregistered securities offerings. 
  • As its source, Bloomberg cited an October 14th court filing in the bankruptcy of Voyager Digital – a company whose assets FTX seeks to acquire. 
  • The Texas agency has requested that FTX not move forward with the $1.4 billion purchase until its investigations are complete. Within the bankruptcy documents, the regulator objected to the acquisition altogether. 
  • “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,” said an FTX spokesperson.
  • This isn’t the first probe of its kind in recent weeks: last month, California regulators targeted Nexo as part of a larger effort against “unregistered interest-bearing cryptocurrency accounts.”
  • The U.S. Securities and Exchange Commission has previously taken issue with crypto interest-bearing accounts for their unusually high returns. 

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