TradeStation Crypto, Inc. Resolves Regulatory Dispute, Settles for 3 Million Dollars in Penalties

Crypto News- In a recent announcement, the Securities and Exchange Commission (SEC) has taken action against TradeStation Crypto, Inc., headquartered in Florida, for its failure to register a crypto lending product promising investors lucrative interest returns.

According to a statement released on Wednesday, the agency disclosed that TradeStation has agreed to settle the charges by paying a penalty of $1.5 million, all while neither admitting nor denying the SEC’s findings.

TradeStation Crypto, Inc. Resolves Regulatory Dispute, Settles for 3 Million Dollars in Penalties

TradeStation, a well-established finance platform founded in 1982 and later acquired by the Japanese finance group Monex in 2011, ventured into the cryptocurrency realm in 2020 by introducing cryptocurrency deposit accounts with interest-earning capabilities. As of 2021, TradeStation boasted 11,122 active users globally participating in its interest feature, as per the filing.

The SEC deemed TradeStation’s crypto lending product as a security, thereby disqualifying it from registration exemption. Consequently, TradeStation ceased offering the service on June 30, 2022, following the SEC’s directive. Despite this, TradeStation announced earlier this year its intention to terminate its crypto-related products and services in the U.S. by February 22, 2024, without admitting any wrongdoing.

Stacy Bogert, associate director of the SEC’s division of enforcement, emphasized the significance of ensuring investor protection through federal securities laws’ disclosure requirements, regardless of the offering’s categorization.

In a simultaneous move, TradeStation also agreed to settle a parallel investigation initiated by the North American Securities Administrators Association (NASAA), a consortium of state securities regulators, by paying an additional $1.5 million.

Elizabeth Harris, chief of New Jersey’s Bureau of Securities, cautioned investors to thoroughly scrutinize cryptocurrency-related investments before committing funds, stressing the allure versus the necessity of due diligence.