The Arkansas Securities Department has recently taken part in a collective settlement with TradeStation Crypto Inc., located in Plantation, Florida. This settlement comes after an investigation into the company’s cryptocurrency program that promised interest earnings.
From August 2020 until June 2022, TradeStation conducted operations that involved offering and selling what effectively amounted to unregistered securities. They did this through a program that allowed investors to earn interest passively on their cryptocurrency by lending it to TradeStation. This setup gave TradeStation control over how these assets were used to generate revenue.
The Securities & Exchange Commission (SEC) identified that the interest-earning feature of this program was indeed a security. Since TradeStation had not sought an exemption for registration, it was obligatory for them to register this financial product.
In the state of Arkansas, there were 85 investor accounts involved in digital asset trading with TradeStation, with a combined value exceeding $92,544.76.
As a resolution to this investigation, TradeStation has agreed to pay a fine amounting to $29,411.76 to the Arkansas Securities Department.
Susannah Marshall, the Commissioner of the Securities Department, remarked on the case, stating, “TradeStation is yet another example of a financial services company offering unregulated services for crypto assets that are not in compliance with Arkansas’s securities laws.” She emphasized the department’s commitment to protecting Arkansas investors, especially when it comes to investments in digital assets and services.
Additionally, TradeStation has announced its intention to discontinue all crypto-related product offerings and services in the U.S. as of February 22, marking a significant shift in its business operations. This move is seen as a response to the regulatory scrutiny and the settlement reached with the Arkansas Securities Department and other states.
