Recently, a decentralized finance crypto lending platform and its owners (respondents) entered into a settlement agreement with a Texas regulatory agency, resolving an emergency cease-and-desist action brought in June 2023. The Texas State Securities Board alleged that respondents committed securities fraud in connection with the offers and sales of investments, falsely denied the platform’s impending bankruptcy, and “secretly” transferred customer funds to a crypto exchange, as well as offered unregistered securities. Under the terms of the settlement, respondents have agreed to, among other things, (i) inform clients of its plan for asset return within seven days of the settlement and provide a seven-day window for clients to withdraw assets through the app; (ii) continue to provide customer support to prior customers; (iii) pay an administrative fine; and (iv) cease-and-desist from selling unregistered securities in the state without admitting or denying the allegations. Texas also agreed to dismiss its emergency cease-and-desist order as part of the settlement.