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Department of Insurance, Securities and Banking

District to Get Share of $1.5 Million Settlement Involving Illegal Crypto Securities Sales to Residents

Thursday, February 15, 2024

(Washington, DC) – The DC Department of Insurance, Securities and Banking (DISB) announced today that TradeStation Crypto, Inc. will pay the District nearly $30,000 out of a $1.5 million multi-state settlement to resolve the Department’s securities investigation into the company’s crypto interest-earning program. The investigation found that TradeStation offered and sold unregistered securities to District residents.

TradeStation, a Florida corporation formed in 2018, provides crypto-asset-related financial services to retail and institutional customers in the United States, including investing and trading services. From about August 2020 to June 2022, TradeStation offered a crypto interest-earning program to District investors. Under this program, investors passively earned interest in crypto assets by loaning them to TradeStation. TradeStation maintained total discretion over the revenue-generating activities used to earn returns for investors. The company offered and promoted its crypto interest-earning program in the District and across the United States via its website and various platforms.

Generally, securities must be registered with the U.S. Securities and Exchange Commission before they can be offered for sale. The $1.5 million multistate settlement, on behalf of 51 U.S. jurisdictions, is the result of 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. The District’s share of the settlement—totaling $29,411.76—will be deposited into the D.C. Treasury.

“Today’s agreement is part of our continuing effort in the District of Columbia to protect investors,” said DISB Commissioner Karima Woods. “We are pleased that our fellow state securities regulators have joined together in this comprehensive settlement.”

If you have questions or concerns about your investments or financial professional, please contact DISB at (202) 727-8000.

Report Fraud
If you believe you have been the victim of financial fraud, contact the DISB Enforcement and Consumer Protection Division at (202) 727-8000. You may also file a report with the Federal Trade Commission (FTC) at or call the FTC Consumer Response Center at (877) 382-4357.

About DISB
The mission of the Department of Insurance, Securities and Banking (DISB) is three-fold: (1) cultivate a regulatory environment that protects consumers and attracts and retains financial services firms to the District; (2) empower and educate residents on financial matters; and (3) provide financing for District small businesses.

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