New Mexico strikes gold in $1.5 million crypto clash

The New Mexico Securities Division has successfully concluded an investigation into TradeStation’s cryptocurrency interest-earning program, resulting in a significant $1.5 million settlement. TradeStation, a Florida-based firm known for its cryptocurrency investment and trading services, offered a program from 2020 to 2022 that allowed New Mexico investors to lend their crypto assets to the company in exchange for interest earnings.

This innovative program caught the attention of regulatory authorities in New Mexico and other states, sparking inquiries into whether it constituted the offering of unregistered securities. TradeStation, while opting to settle, did not acknowledge any wrongdoing related to the potential regulatory concerns raised by the program.

As part of the resolution, TradeStation has revised its terms of service and committed to discontinuing the interest-earning feature for any financial instruments that are not regulated. The company has agreed to disburse a total fine of $1.5 million, to be divided evenly among 51 participating jurisdictions, as outlined in the settlement agreement.

New Mexico’s share of the settlement amounts to over $29,000, which will be allocated to the state’s Current School Fund, as confirmed by the Regulation and Licensing Department. This fund supports various educational initiatives and programs across the state, ensuring that the settlement contributes to the betterment of New Mexico’s educational landscape.

Alissa Berger, an attorney representing the New Mexico Securities Division, emphasized the division’s dedication to safeguarding investors and maintaining trust in the investment landscape. “The Securities Division is committed to protecting investors and ensuring New Mexicans have confidence when investing their money,” she stated. Berger also highlighted the importance of regulatory compliance for companies operating within the burgeoning field of cryptocurrency and related technologies. She added, “State securities regulators recognize the value that new, crypto-related technology brings to financial markets, but it is imperative those providing these services are complying with existing laws and regulations that help promote a competitive capital market.”

This settlement marks a significant step in the ongoing effort to regulate the rapidly evolving cryptocurrency market and ensure that investment products comply with established legal and regulatory frameworks.