Crypto exchange FTX, along with its billionaire Founder and CEO Sam Bankman-Fried, are being probed by the Texas securities regulator over whether certain lending offerings on the platform are in violation of state law.
Texas Probes FTX and SBF
The Texas State Securities Board is investigating FTX.US to determine whether the crypto exchange offers unregistered securities products in the U.S. via its yield-bearing services.
In a court filing, the TSSB’s Director of Enforcement Joseph Jason Rotunda explained that he had carried out a test, and determined that he was able to set up an account with FTX and earn yield on his Ethereum (ETH) deposit through services offered by the exchange.
Rotunda underlined that “such appears to be regulated as a security in Texas.” As a result “FTX Trading, FTX US, and their principals, including Sam Bankman-Fried” are under investigation by the regulator.
The aforementioned entities have been charged with violating state law in regards to the registration and sale of securities products. The probe has caused FTX’s acquisition of Voyager Digital’s assets for $1.42 billion to grind to a halt for the duration.
FTX Token (FTT) Nosedives
The news had an instant impact on the price of FTX Token (FTT). Just minutes after the investigation was disclosed, the price of FTT fell from $24.27 to as low as $23.31, and at the time of writing, FTT trades at $23.77.
The 24 hour price chart for FTX Token (FTT). Source: CoinMarketCap
On the Flipside
- Sam Bankman-Fried recently announced some major updates that will be implemented over the next month as the exchange prepares to transition to FTX V2.
Why You Should Care
The investigation will prevent FTX’s acquisition of Voyager Digital until the SEC makes a determination over whether the exchange and SBF are in compliance with securities laws.
Find out more about FTX V2 below:
Sam Bankman-Fried Announces Big Updates in Preparation for FTX V2
The exchange is looking to expand on multiple fronts. Find out more:
FTX Partners with Visa to Introduce Crypto Debit Cards in 40 Countries