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Sunday, December 4, 2022

FTX Under Investigation For Security Violations

Barron’s reported on Monday that the Texas State Securities Board is looking into the activities of FTX CEO Sam Bankman-Fried and FTX US, the American affiliate of the cryptocurrency behemoth.

According to paperwork presented by enforcement director Joe Rotunda, FTXUS may be marketing unregistered securities in the guise of interest-bearing accounts throughout the United States. The exchange is not licensed by the Texas Department of Banking to act as either a money transmitter or a vendor of payment instruments. Additionally, the Texas State Securities Board has not approved it as a dealer in securities. Despite the company’s denials of offering U.S. yield-bearing accounts, Rotunda said he was able to open one. 

FTX May Have Violated Security Protocols

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The damaging claims were submitted to the bankruptcy court handling the liquidation of Voyager Digital’s assets. According to reports, it has settled on a $51 million price tag to buy Voyager’s property. According to Barron, the bitcoin trading platform has begun communicating with government agencies. It is their contention that it has a pending application in the state. Texas securities authorities are looking into possible wrongdoing on the part of cryptocurrency exchange FTX, its US subsidiary FTX, and its founder and CEO Sam Bankman-Fried, as detailed in a state filing.

Based on information disclosed in a bankruptcy case made by Voyager Digital, regulators are looking into whether or not the interest-bearing accounts supplied by FTX US are unregistered securities. To buy the company’s assets, FTX just won the offer. As reported originally by Barron’s.

Using the app, Rotunda was able to open an account and start earning interest on his Ethereum and bank account monies, as he explains in the filing.

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Up to 8% APY (annual percentage yield) may be earned on the first $10,000 deposited with them, and up to 5% APY can be earned on sums exceeding $10,000 but less than $10 million. It has been brought to Rotunda’s attention that F. US has not filed the necessary paperwork to offer or sell securities in the state of Texas.

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