Sam Bankman-Fried and FTX US — the U.S. affiliate of the FTX crypto exchange — are under investigation by the Texas securities regulator in an expanding probe by enforcement agencies into the billionaire founder and CEO’s businesses.

FTX US may be violating state law governing the registration and sale of securities because it offers a yield-bearing product to U.S. customers, the Texas State Securities Board alleged in a recent court filing.

Joseph Rotunda, director of enforcement for the Texas State Securities Board, made the allegation in a filing to the bankruptcy court overseeing the potential sale of Voyager Digital’s assets to FTX.

“The Enforcement Division is now investigating FTX Trading, FTX US, and their principals, including Sam Bankman-Fried,” Rotunda said in the filing.

In question are accounts offered by FTX that pay investors a yield in exchange for depositing their cryptocurrency with the firm, Rotunda said. The Securities and Exchange Commission, Texas and dozens of other state securities regulators have looked into Voyager and other crypto firms for offering similar accounts. Regulators say they are unregistered securities that don’t disclose their risks to investors.

Rotunda wrote said that he downloaded the FTX app to his phone, created an account and transferred money through a bank and an Ethereum transaction to the new account. The app said he was eligible for a yield-bearing account, despite the company’s terms and conditions saying FTX will not provide services to U.S. residents.

FTX yield accounts can earn up to 8% APY on the first $10,000 submitted, Coindesk reported.

“Despite the fact I identified myself by name and address, the FTX Trading App now shows that I am earning yield on the ETH. The yield is valued at 8% APR,” Rotunda wrote. This “appears to be an investment contract,” which would be regulated as a security in Texas, he wrote. FTX US has not registered its yield program in Texas.

Voyager was one of several companies that offered crypto investors high yields if they deposited their tokens on the platform. Federal and state agencies have investigated Voyager and bankrupt lender Celsius Network, which they say illegally offered unregistered securities. Voyager declared bankruptcy in June.

BlockFi, which offered similar accounts, agreed in February to pay $100 million to the SEC and state agencies in the highest-ever crypto enforcement penalty. As part of that settlement, BlockFi agreed to either register with the SEC or make changes so such a registration would be unnecessary, Barrons reported.

Some of the firms being investigated dispute that their products are securities.

FTX said it is in communication with the Texas regulator. “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,” a spokesperson said in a statement.

One of the world’s richest people, Bankman-Fried moved his headquarters in 2021 from Hong Kong to the Bahamas — the Caribbean island country credited with having one of the world’s first comprehensive crypto regulatory authorities.

FTX raised $400 million in January at a $32 billion valuation. With a net worth of $17 billion, Bankman-Fried said he wants FTX to become “biggest source of financial transactions in the world.”