TradeStation Crypto agrees to pay $3 million to settle with the US SEC and NASAA
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TradeStation Crypto recently agreed to pay $3 million in order to settle the charges with the US Securities and Exchange Commission (SEC) for not registering a crypto lending product. The firm’s product allowed investors to earn interest on their deposits, but the company failed to register with the securities regulator.
TradeStation to pay $1.5m to both SEC and NASAA
This Wednesday, February 7, the SEC said that the Monex Group’s digital asset-oriented subsidiary will pay $1.5 million penalty. TradeStation agreed to pay, even though it neither admitted nor denied the accusations.
In addition to choosing to settle with the SEC, the firm will also pay another $1.5 million penalty to settle a separate investigation conducted by the North American Securities Administrators Association (NASAA). The Association’s task force conducted a probe of eight state securities regulators, focusing on the same crypto interest-earning program in 2023.
Commenting on the matter, the associate director of the SEC’s division of enforcement, Stacy Bogert, stated that this case highlights the importance of making sure that the investors will benefit from disclosure requirements provided by the federal securities laws, regardless of what label is applied to the offering.
Meanwhile, New Jersey’s Bureau of Securities noted that the Association understands that investing in crypto asset securities can be alluring. However, investors need to take time to conduct a proper background check of any crypto-related investments before they hand over their money.
TradeStation complied with the SEC’s directive
TradeStation is a subsidiary of the Japanese finance group, Monex. Originally founded in 1982, the company was acquired by Monex in 2011, only to venture into the crypto sector nine years later, in 2020. At the time, it offered deposit accounts which allowed investors to earn interest.
Only a year later, in 2021, the platform’s interest feature attracted 11,122 active users on a global level. However, after investigating the firm, the SEC decided that TradeStation’s crypto lending product is a security, and since it was not registered with the regulator, the company was violating federal law.
The platform responded by removing the service on June 30, 2022, following the SEC’s directive, meaning that it chose to comply right away.
Then, earlier this year, TradeStation also announced that it plans to fully terminate its crypto-related products and services in the US, and that this will be done by February 22. The company still dod not admit to any wrongdoings.
