INDIANAPOLIS – Indiana Secretary of State Diego Morales announces the Indiana Securities Division has settled with TradeStation Crypto, Inc. (TradeStation) to resolve the Indiana Securities Division’s investigation into TradeStation’s crypto interest-earning program.
As a result of the settlement, TradeStation has paid $29,411.76 to the State of Indiana. This amount is divided between the Securities Enforcement Fund and the Indiana General Fund. In addition to the penalty, TradeStation was ordered to cease and desist from offering, selling, or renewing the Interest Feature or any security not registered, qualified, or exempt to investors in Indiana. This settlement is in connection to only TradeStation’s crypto platform.
TradeStation, a Florida corporation formed in 2018, provides crypto-asset-related financial services, including investing and trading services, to retail and institutional customers in the United States. From August 2020 to June 2022, TradeStation offered a crypto interest-earning program to 130 Hoosier investors. Under this program, investors passively earned interest on crypto assets by loaning them to TradeStation. TradeStation maintained total discretion over the revenue-generating activities utilized to earn returns for investors. The company offered and promoted its crypto interest-earning program in Indiana and the United States via its website and various platforms.
The $1.5 million multistate settlement, on behalf of 51 United States jurisdictions, results from a North American Securities Administrators Association task force of eight state securities regulators from Alabama, California, Mississippi, North Carolina, Ohio, South Carolina, Washington, and Wisconsin. The task force determined that during the offering period, TradeStation engaged in the unregistered offer and sale of securities via its crypto interest-earning program.
“TradeStation’s failure to comply with registration requirements meant that investors were sold unregistered securities in violation of the Indiana Uniform Securities Act. It is also troublesome that Investors were deprived of critical information and disclosures necessary to understand the potential risks of TradeStation’s crypto interest-earning program. Hoosier investors can best be protected through proper registration as well as knowing potential risks,” said Diego Morales, Indiana Secretary of State.
