On January 10, 2023 by the Michigan Department of Insurance and Financial Services (DIFS),
issued an order regarding two companies, West Realm Shires Services, Inc. dba FTX US (“FTX US”) and FTX Lend Inc. Both companies are related and held licenses under the Money Transmission Services Act (MTSA) and the Regulatory Loan Act (RLA) respectively. According to the Order, both companies are wholly owned subsidiaries of West Realm Shires Inc.
DIFS found that between October 25, 2021, and December 31, 2022, FTX US held a Michigan money transmitter license under the MTSA. According to DIFS, the company failed to meet the renewal requirements and the license expired on January 1, 2023.
The DIFS ordered that the license for FTX US as “EXPIRED” and that FTX US needs to reapply and demonstrate compliance with all provisions of the MTSA. Additionally, the license for FTX Lend Inc. was ordered “SUSPENDED IMMEDIATELY and INDEFINITELY” and that FTX Lend needs to demonstrate compliance with all provisions of the RLA to be able to operate again.
DIFS found that FTX Lend Inc. and FTX US were both facing financial troubles and that the continuation of their business operations under the above licenses presents an imminent threat of financial loss or imminent threat to the public welfare. According to the Order, DIFS received notice that the surety bond secured on behalf of Respondent FTX US was canceled and that the company filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware on November 11, 2022. Respondents failed to notify DIFS of this bankruptcy filing as required of Respondent FTX US by Section 23(3)(a) of the MTSA.
The Order also states that acceptance of the Stipulation to Entry of Order is reasonable and in the public interest and all applicable provisions of the Michigan Administrative Procedures Act have been met.