The Arkansas Securities Department announced it has joined a multistate settlement with TradeStation Crypto Inc. of Plantation, Florida, to resolve an investigation into the company’s cryptocurrency interest-earning program.
The investigation determined that TradeStation engaged in the unregistered offer and sale of securities via its cryptocurrency interest-earning program from August 2020 to June 2022. Under the program, investors passively earned interest on cryptocurrency assets by loaning them to TradeStation, which maintained discretion over the revenue-generating activities used to earn returns.
The Securities & Exchange Commission found that TradeStation offered and sold the interest-earning feature as a security, and since it did not qualify for a registration exemption, TradeStation was required to register the product.
In Arkansas, there were 85 active investor digital asset trading accounts collectively valued at over $92,544.76.
Under the terms of the settlement, TradeStation will pay a fine of $29,411.76 to the state Securities Department.
“TradeStation is yet another example of a financial services company offering unregulated services for crypto assets that are not in compliance with Arkansas’s securities laws,” Susannah Marshall, commissioner of the Securities Department, said in a statement. “The ASD’s continued participation in multistate actions against crypto trading platforms shows our commitment to ensuring that Arkansas investors are protected by our state’s securities laws when choosing investments involving digital assets and services.”
TradeStation announced earlier this year that it plans to cease all crypto-related product offerings and services in the U.S. by Feb. 22.
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