TradeStation Crypto agrees to pay $3 million settlement over unregistered interest product offering

TradeStation Crypto, a subsidiary of Monex Group, a Japanese brokerage and cryptocurrency exchange, has reached a $3 million settlement with the United States Securities and Exchange Commission (SEC) and regulators from 26 states. The settlement resolves allegations that the Florida-based company offered an unregistered crypto-lending product to investors. The SEC found that between August 2020 and June 2022, TradeStation Crypto allowed U.S. investors to deposit or purchase crypto assets in exchange for interest payments. The SEC concluded that this product was an unregistered security. TradeStation Crypto neither admitted nor denied the findings. The North American Securities Administrators Association (NASAA) also disclosed that TradeStation Crypto had reached a settlement with state regulators. This settlement was the result of an investigation led by eight states under the coordination of the NASAA. TradeStation Crypto has announced that it will discontinue its products and services in the United States by Feb. 24. This decision marks a shift in focus for the company, as its parent company, Monex Group, has been actively investing in the crypto sector and pursuing expansion through acquisitions and planned listings on international stock exchanges. Monex Group’s involvement in the cryptocurrency market can be seen through its acquisition of Coincheck, a Japan-based crypto exchange, after a major security breach, and its investment in 3iQ Digital Holdings. Monex Group has also announced its intentions to list Coincheck on the U.S. Nasdaq stock exchange through a merger with Thunder Bridge Capital Partners IV. The SEC’s enforcement activities extend beyond the TradeStation Crypto settlement, as it has recently announced charges against Brian Sewell, the founder of the American Bitcoin Academy, for orchestrating a fraudulent cryptocurrency scheme. Sewell’s operation allegedly deceived students out of approximately $1.2 million by offering educational courses on cryptocurrency investing.