SEC To Probe Crypto Lending Products By Gemini And Celsius

SEC’s main concern, according to reports, is the high-yielding offerings of crypto lending services, which are frequently significantly higher than those of most saving banks.

The Securities and Exchange Commission (SEC) of the United States is reportedly looking into some of the high-yield crypto lending products offered by Gemini, Celsius Network, and Voyager Digital.

According to a Bloomberg report, the SEC is conducting an investigation into digital asset lending services.

The main focus of the investigation, according to reports, is whether crypto lending services could be considered securities and thus required to be registered with the commission.

iexclusivenews gathered that Gemini and Celsius did not immediately respond to Cointelegraph’s request for comment.

The SEC’s main concern, according to reports, is the high-yielding offerings of crypto lending services, which are frequently significantly higher than those of most saving banks.

Crypto lending services offer interest rates ranging from 3% to 18%, whereas traditional banks’ savings accounts offer less than 0.1 percent.

Savings accounts at banks are insured by the Federal Deposit Insurance Corporation, which protects investors from bank failure and theft.

However, crypto lending services lend their customers’ digital assets to other investors, raising investor protection concerns, according to the SEC.

It is worth noting that the SEC has not charged the firms with any wrongdoing.

Since September 2021, cryptocurrency lending services have been subjected to a regulatory crackdown in the United States.

Celsius Network was issued a cease and desist order by state regulators in New Jersey and Texas.

Celsius and BlockFi were ordered to cease operations by the New York Attorney General’s (NYAG) office in October 2021. The NYAG accused the platforms of wrongdoing and issued a cease and desist order.

After the SEC threatened a lawsuit, Coinbase, the leading American crypto exchange, had to shut down their crypto yield product before it even launched.