Sam Bankman Fried and his companies FTX and FTX US are being investigated by regulators of the State of Texas, which could prevent FTX’s purchase of Voyager Digital’s assets. 

The details were revealed in a court filing by Texas State Securities Board enforcement director Joe Rotunda in the bankruptcy case of Voyager Digital. “The Enforcement Division is now investigating FTX Trading, FTX US, and their principals, including Sam Bankman-Fried,” wrote Rotunda.

A few weeks ago, FTX won the auction to acquire Voyager’s distressed assets, agreeing to pay $1.4 billion. 

Regulators are investigating whether FTX offered unregistered securities with its yield-bearing accounts to US customers. This would be a violation of the securities law, according to Rotunda. 

FTX allows users to earn yield on its deposits, up to 8% annual percentage yield (APY) on the first $10,000 and 5% APY above the $10,000 mark. 

The director said he signed up on  FTX US and transferred some ether. Despite registering as a US resident, the app offered the opportunity to earn yield, which would constitute an investment contract.

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

“We have an active application for a license which has been pending, and believe we are operating fully within the bounds of what we can do in the interim,” an FTX spokesperson said in a statement.