Sam Bankman Fried and his companies FTX and FTX US are being investigated by regulators of the Dispute of Texas, which can well stop FTX’s buy of Voyager Digital’s belongings.

The predominant points were revealed in a court submitting by Texas Dispute Securities Board enforcement director Joe Rotunda in the bankruptcy case of Voyager Digital. “The Enforcement Division is now investigating FTX Procuring and selling, FTX US, and their principals, in conjunction with Sam Bankman-Fried,” wrote Rotunda.

A few weeks ago, FTX won the public sale to construct Voyager’s distressed belongings, agreeing to pay $1.4 billion.

Regulators are investigating whether FTX equipped unregistered securities with its yield-bearing accounts to US prospects. This is able to well be a violation of the securities law, in accordance with Rotunda.

FTX enables users to assemble yield on its deposits, as much as eight% annual share yield (APY) on the predominant $10,000 and 5% APY above the $10,000 designate.

The director said he signed up on  FTX US and transferred some ether. Irrespective of registering as a US resident, the app equipped the opportunity to assemble yield, which would constitute an funding contract.

“The yield program appears to be an funding contract, evidence of indebtedness and showcase, and as such appears to be regulated as a security in Texas,” the submitting said.

“We delight in now got an active utility for a license which has been pending, and deem we are working completely internal the boundaries of what we can attain in the duration in-between,” an FTX spokesperson said in a assertion.