The Securities and Exchange Commission (SEC) has
charged TradeStation Crypto, Inc., a Florida-based company, for failing to
register the offer and sale of a crypto lending product. TradeStation has
agreed to pay a $1.5 million penalty to settle the charge concerning an
interest feature on crypto asset accounts.
TradeStation began offering the crypto lending
product with an interest feature around August 2020. Promoted as a way for
investors to earn interest, investors could deposit or purchase crypto assets
in a TradeStation account in exchange for the company’s promise to pay
interest.
According to the regulator, TradeStation offered and
sold the crypto lending product as a security but failed to register it.
Despite voluntarily stopping the interest feature on June 30, 2022,
TradeStation faces penalties.
Stacy Bogert, the Associate Director of the SEC’s
Division of Enforcement, mentioned: “The SEC charged TradeStation with
failure to register its crypto lending product before offering it to investors.
This case highlights the importance of ensuring that investors benefit from the
disclosure requirements provided by the federal securities laws, regardless of
the label applied to the offering.”
Settlement and Regulatory Actions
TradeStation, without admitting or denying the
findings, agreed to a cease-and-desist order and a $1.5 million civil penalty.
Additionally, TradeStation will pay an extra $1.5 million to settle similar
charges by state regulatory authorities.
The Securities and Exchange Commission (SEC) has
charged TradeStation Crypto, Inc., a Florida-based company, for failing to
register the offer and sale of a crypto lending product. TradeStation has
agreed to pay a $1.5 million penalty to settle the charge concerning an
interest feature on crypto asset accounts.
TradeStation began offering the crypto lending
product with an interest feature around August 2020. Promoted as a way for
investors to earn interest, investors could deposit or purchase crypto assets
in a TradeStation account in exchange for the company’s promise to pay
interest.
According to the regulator, TradeStation offered and
sold the crypto lending product as a security but failed to register…
