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Post: TradeStation Crypto Settles with SEC and State Regulators Over Unregistered Lending Product: Key Points and Hot Take

TradeStation Crypto Settles with SEC and State Regulators Over Unregistered Lending Product: Key Points and Hot Take

Key Points:

  • Trading platform TradeStation Crypto settled with the SEC and state regulators for failing to register an interest-bearing lending product.
  • Between August 2020 and June 2022, TradeStation Crypto offered a crypto lending product that allowed US investors to deposit or purchase crypto assets in exchange for interest payments.
  • The SEC found that the product was an unregistered security, and TradeStation Crypto agreed to pay $3 million in penalties.

TradeStation Crypto settles with SEC and state regulators over unregistered lending product

Trading platform TradeStation Crypto has reached a settlement with the United States Securities and Exchange Commission (SEC) and a taskforce of state regulators. The settlement relates to TradeStation Crypto’s failure to register an interest-bearing lending product that it offered between August 2020 and June 2022.

The lending product allowed US investors to deposit or purchase crypto assets in a TradeStation account and receive interest payments in return. The SEC determined that this product should have been registered as a security due to its characteristics. TradeStation Crypto has agreed to pay $3 million in penalties, which will be split between the SEC and the participating states.

While TradeStation Crypto did not admit to or deny the SEC’s findings, the settlement signifies the importance of complying with regulatory requirements in the cryptocurrency industry. It serves as a reminder to other platforms to carefully navigate the ever-evolving regulatory landscape to avoid similar consequences.

Hot Take:

TradeStation Crypto’s settlement with the SEC and state regulators highlights the regulatory challenges faced by cryptocurrency platforms. The enforcement action underscores the need for platforms to thoroughly understand and comply with securities regulations to avoid legal and financial penalties. As the cryptocurrency industry continues to grow and evolve, regulatory scrutiny will likely increase, making compliance an essential aspect of doing business in this space.

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