Investigation Launched Against FTX Trading
On October 14, the Texas State Securities Board (SSB) and the Texas Department of Banking filed a supplemental declaration in the ongoing case concerning Voyager Digital, revealing that they are investigating FTX Trading and FTX US, including their co-founder and CEO, Sam Bankman-Fried. The investigation centers on allegations that FTX offered unregistered securities within the United States. This scrutiny comes in the wake of FTX US winning an auction for Voyager Digital’s remaining assets back on September 26—a deal that could add fuel to an already complex situation.
Texas Regulators Raise Concerns
The supplemental declaration is part of an objection to the sale of Voyager Digital assets to FTX from the Office of the Texas Attorney General, filed at the same time. The state articulates that both Voyager and FTX are allegedly out of compliance with Texas law, asserting that the proposed sale appears to allow the companies to evade liability for unlawful conduct—something Texas regulators aren’t shy about calling out. The objection highlights that Voyager conducted unlicensed money transmissions without the necessary securities dealer registration in Texas. A bold move indeed!
The Investigation’s Findings
Joseph Rotunda, Director of the SSB Enforcement Division, noted in his declaration that he was able to download the FTX Trading app and create a yield-bearing account under his name and Texas address without any hitches. Although FTX Trading claims it doesn’t operate in the U.S., Rotunda stated that the app indicates he is earning an 8% annual yield on ETH. His conclusion? This setup points towards an investment contract, prompting him to assert that FTX US shouldn’t be allowed to acquire Voyager Digital’s assets until compliance with state regulations is fully assessed.
Voyager Digital’s Bankruptcy Proceedings
With Voyager Digital having filed for bankruptcy in July, the proceedings are now conducted in the United States Bankruptcy Court for the Southern District of New York. Notably, FTX’s co-founder Gary Wang and director of engineering Nishad Singh are also involved in this declaration, adding more names to an already high-stakes narrative.
FTX Celebrates Dubai Registration
In contrast to the investigation back home, FTX had a reason to celebrate recently, announcing via Twitter that they have been registered by Dubai’s Virtual Asset Regulatory Authority (VARA). With their FZE subsidiary receiving a Minimal Viable Product license back in July, Bankman-Fried expressed excitement about expanding their presence in Dubai and collaborating with regulators to establish a robust framework for digital assets that prioritizes customer protection and innovation. Sounds like they’re keeping their eyes on the prize amidst the turbulence!
