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

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.