The Securities and Exchange Commission (SEC) today announced charges against TradeStation Crypto, Inc. for failing to register the offering and sale of a cryptocurrency lending product that allowed US investors to deposit or purchase crypto assets in a TradeStation account in exchange for the company’s promise to pay interest.
To settle the SEC’s charges, TradeStation agreed to pay a $1.5 million fine.
Pursuant to the SEC order, TradeStation began offering and selling the crypto lending product with the interest feature around August 2020. TradeStation launched the interest feature as a way for investors to earn interest and “Put the assets cryptocurrencies to work for you’ and TradeStation had full discretion on how to develop the assets to generate income to pay interest to investors.
The order finds that TradeStation offered and sold the interest-bearing crypto-lending product and, as it did not qualify for a registration exemption, TradeStation should have registered its offer and sale, but failed to do so.
Pursuant to the order of the Securities and Exchange Commission, on June 30, 2022, TradeStation voluntarily ceased offering and selling the feature of interest to investors. TradeStation announced earlier this year that it plans to end all crypto-related products and services in the US market on February 22, 2024.
Without admitting or denying the SEC’s findings, other than the civil penalty, TradeStation agreed to a cease and desist order barring it from violating the registration provisions of the Securities Act of 1933. In parallel actions announced today, TradeStation agreed to pay an additional $1.5 million in fines to settle similar charges by state regulators.