Texas is investigating whether a major digital asset exchange and its billionaire founder have broken the state’s securities law.
The FTX investigation also names CEO Sam Bankman-Fried, who is a major supporter of Beto O’Rourke’s campaign for Texas governor. In the latest fundraising period between July 1 and Sept. 29, the crypto billionaireJoe Rotunda, the state securities board enforcement director who drafted the filing, told The Texas Tribune that the investigation was not prompted by any complaints. Instead, he recalled noticing that FTX has started offering interest-bearing products to retail investors in the U.S.
And while FTX has not registered to sell securities in Texas, Rotunda found that he could easily join the exchange’s yield-earning program even after listing his Austin address. “We want to make sure that everyone who invests their money has full disclosure of all the important information and the investor protection mechanisms are in place,” he said., a company spokesperson said “we have an active application for a license which has been pending, and believe we are operating fully within the bounds of what we can do in the interim.
In the meantime, Rotunda stressed that the agency welcomes working with FTX to bring it into compliance, which means the exchange would have to get licensed to sell securities in the state or find exemptions to registration. He noted that this process is pulling from a framework that Texas regulators have developed from
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