TechFlow news, the U.S. Securities and Exchange Commission (SEC) announced that Florida-based TradeStation Crypto has been charged with failing to register the offer and sale of a cryptocurrency lending product that allowed U.S. investors to deposit or purchase crypto assets into TradeStation accounts in exchange for the company's promise to pay interest.
To resolve the SEC's charges, TradeStation has agreed to pay a $1.5 million penalty. According to the SEC's order, TradeStation began offering and selling its interest-bearing cryptocurrency lending product around August 2020. TradeStation marketed the interest feature as a way for investors to earn interest and "let your crypto work for you," with TradeStation having sole discretion over how to deploy the assets to generate revenue to fund investor interest payments.
The order found that TradeStation's offer and sale of its interest-bearing cryptocurrency lending product constituted a security, and because it did not qualify for any registration exemption, TradeStation was required to register the offering and sale but failed to do so.
