An Oct. 14 court filing has revealed that Texas State Securities Board (TSSB) is investigating FTX.US and Sam Bankman-Fried over the offering of unregistered securities.

Barrons first reported the filing.

The filing was made by Joseph Rotunda, the Director of Enforcement at TSSB. He claimed the crypto exchange violated state law by offering yield-bearing products to its U.S. customers. According to him, the FTX product is similar to the yield-bearing depository accounts offered by bankrupt crypto lender Voyager Digital.

Rotunda wrote that the exchange’s terms and conditions said it would not provide its services to U.S. residents. However, he discovered he was earning around 8% APR on his Ethereum (ETH) deposits with the firm. He said:

“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.”

He continued that “FTX Trading and FTX US may not be fully disclosing all known material facts to
clients prior to opening accounts and earning yield, thereby possibly engaging in fraud and/or making offers containing statements that are materially misleading or otherwise likely to deceive the public.”

Rotunda declared that FTX US should not be allowed to purchase Voyager’s assets because of these infractions of the securities law.

FTX did not reply to CryptoSlate request for comment as of press time.

The post Texas is investigating FTX US, Sam Bankman-Fried over unregistered securities offerings appeared first on CryptoSlate.

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