Lyn Peters, Director of Communications
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Washington State Department of Financial Institutions to receive nearly $30,000 in settlement regarding offer and sale of unregistered securities

OLYMPIA – The Washington State Department of Financial Institutions (DFI) joined members of the North American Securities Administrators Association (NASAA) and the Securities and Exchange Commission (SEC) in entering a settlement totaling $3 million with TradeStation Crypto, Inc. (TradeStation). TradeStation is a Florida corporation formed in 2018 that provides crypto-asset-related financial services to retail and institutional customers in the United States. In the settlement, TradeStation agreed to pay a total of up to $1.5 million to state securities regulators, about $29,000 of which has been paid to DFI.

For the past two years, DFI, along with the California Department of Financial Protection and Innovation (CA DFPI), led a task force of state regulators from Alabama, Mississippi, North Carolina, Ohio, South Carolina, and Wisconsin, investigating TradeStation’s possible offer and sale of securities. The investigation revealed that TradeStation offered a crypto interest-earning program to Washington investors, in the form of an interest feature associated with investor digital trading accounts. Under this program, investors passively earned interest on crypto assets by loaning them to TradeStation. TradeStation maintained total discretion over the revenue-generating activities utilized to earn returns for investors. The company offered and promoted their crypto interest-earning program in Washington and the United States at large via its website and various platforms without a license to do so.   

As a result of the investigation, DFI and CA DFPI led the task force negotiations with TradeStation to settle the allegations of the offer and sale of unregistered securities. The eight working group states and 18 additional securities regulators have agreed to the terms of the settlement. More states are expected to follow. DFI and TradeStation entered a consent order adopting the settlement terms on Dec. 21, 2023.

In addition to the monetary settlement, TradeStation agreed to cease and desist from offering, selling, or renewing the interest feature or any security that is not registered, qualified, or exempt, to investors in all NASAA jurisdictions, including Washington.

“Washington DFI is committed to working with our colleagues in other jurisdictions to ensure companies go through the proper process of registering their products,” DFI Director Charlie Clark said. “It’s important for investors to know they are working with licensed entities and that their investments are registered with their state’s securities regulator.”

DFI continues to investigate the offer and sale of interest-bearing cryptocurrency accounts and will consider enforcement actions against firms that offer these accounts without complying with state law.

Firms that need to register and deal with past unregistered activity should reach out to DFI’s Division of Securities, either online at or by mail, phone or fax at:

Mailing Address:
Department of Financial Institutions
Securities Division
.O. Box 41200
Olympia, WA 98504-1200

Main Telephone: 360-902-8760
Toll Free Telephone: 877-RING DFI (746-4334)
Fax: 360-902-0524
TDD: 360-664-8126

Washington State investors are encouraged to use DFI’s licensee database or contact the Securities Division to verify the registration status of a firm before investing their money.

Recent bankruptcies of a few major companies operating in this space have revealed that consumers holding accounts at these types of companies may be considered unsecured creditors. Investors also should be aware that funds held on cryptocurrency trading platforms are likely not insured by the FDIC. Recently, the FDIC issued a Fact Sheet clarifying when an account is considered FDIC insured.

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