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New Jersey AG Announces Settlement with Crypto Firm TradeStation
Florida-Based Company Agrees to Halt Sales of Unregistered Crypto Securities in Multistate Agreement
TRENTON, NJ – Attorney General Matthew J. Platkin, in conjunction with the Division of Consumer Affairs, disclosed a significant settlement with TradeStation Crypto, Inc., addressing the offer and sale of unregistered securities tied to the company's cryptocurrency interest-earning program. This $1.5 million settlement, impacting 51 jurisdictions across the United States, stems from the collaborative efforts of the North American Securities Administrators Association (NASAA) task force, emphasizing stringent enforcement of regulatory standards for crypto asset securities.
TradeStation Crypto, Inc., a Florida-based entity, has been offering digital asset-related financial services to both retail and institutional clients in the United States. The services encompassed various digital assets, including prominent cryptocurrencies like Bitcoin, Ether, Litecoin, and USD Coin, facilitating investing and trading opportunities for its customers.
Attorney General Platkin underscored the critical nature of regulatory frameworks in ensuring both investor protection and market integrity. He stressed that crypto asset securities are subjected to the same stringent regulatory standards as traditional securities, affirming the state's commitment to action against firms falling short of regulatory compliance.
The settlement highlights a growing focus on the oversight of crypto asset securities, with state regulators spearheading initiatives to ensure investor protections and enhance the stability and trust in the digital asset landscape. Acting Director of the Division of Consumer Affairs, Cari Fais, and Bureau Chief of the Bureau of Securities, Elizabeth Harris, echoed the importance of investor diligence and the role of informed decision-making in the realm of cryptocurrency investments.
The NASAA task force, comprising securities regulators from multiple states including Alabama, California, and Wisconsin, pinpointed TradeStation's engagement in the sale of unregistered securities through its crypto interest-earning program. This program allowed investors to earn interest passively on crypto assets loaned to TradeStation, with the firm maintaining complete control over the revenue-generating activities.
The investigation, covering the period from August 2021 to June 2022, identified at least 142 New Jersey investors participating in the program. As part of the consent order, TradeStation has agreed to pay a civil penalty of $29,411.76 and to cease the offer and sale of securities unless they are registered or exempt.
This settlement serves as a reminder of the regulatory obligations of firms operating within the cryptocurrency sector and the ongoing efforts of state regulators to protect investors and uphold the integrity of the evolving digital asset market.
