The Arizona Corporation Commission entered into a settlement with TradeStation Crypto, Inc., to resolve Arizona’s securities investigation into the company’s crypto interest-earning program.
TradeStation has already paid back the Arizona investors but is still ordered to pay a $29,411 administrative penalty to the state of Arizona for selling the unregistered investment program.
“Today’s agreement reflects the ongoing efforts by state securities regulators to protect investors,” said Chairman Jim O’Connor. “We are pleased to know that the investors received their money back.”
TradeStation, a Florida corporation formed in 2018, provides crypto-asset-related financial services to retail and institutional customers in the United States, including investing and trading services. From August 2020 to June 2022, TradeStation offered a crypto interest-earning program to Arizona investors. Under this program, investors passively earned interest on crypto assets by loaning them to TradeStation. TradeStation maintained total discretion over the revenue-generating activities utilized to earn returns for investors. The company offered and promoted their crypto interest-earning program in Arizona and the United States at large via its website and various platforms.
The $1.5 million multistate settlement was negotiated by a North American Securities Administrators Association (NASAA) task force. NASAA is an association of United States and Canadian securities regulators. The task force determined that during the offering period, TradeStation engaged in the unregistered offer and sale of securities via its crypto interest-earning program.
So what was the crime? That a company didn’t submit to the power of the state and the whims of ‘regulators’?
“Nut’n gets loaded what don’t get loaded tru da union.” – Eraser (1996)