Celsius network crypto lending firms, Gemini face SEC scrutiny. According to people familiar with the matter. Including representatives from the Securities and Exchange Commission. The Securities and Exchange Commission is conducting a broader investigation. Into companies that pay interest on virtual token deposits. The Securities and Exchange Commission is looking into cryptocurrency firms Celsius Network. Voyager Digital Ltd., and Gemini Trust Co. Celsius Network, Voyager Digital Ltd. And Gemini Trust Co. are among the names of companies that are currently being probed.
Individuals who spoke on the condition of anonymity stated. That the SEC’s enforcement inquiry is primarily focused. On whether the companies’ offerings should be registered as securities with the regulatory agency. The Securities and Exchange Commission (SEC) as well as states. Such as New Jersey and Texas have expressed concern about companies offering customers interest rates. That are higher than those offered by most bank savings accounts. Because they lend out their digital coins to other investors. This practice has attracted the attention of the SEC. As well as states such as New Jersey and Texas.
Not only do the investigations raise questions about the legitimacy of digital assets. But they also increase the uncertainty surrounding the burgeoning sector. Which is dealing with sharply falling coin prices — Bitcoin. For example, has fallen by half since reaching an all-time high earlier this month. As well as regulatory bodies eager to put safeguards in place around digital assets.
According to Bloomberg, the SEC is investigating another cryptocurrency lender, BlockFi Inc., and both Celsius and BlockFi have previously been targeted by state securities regulators in the US. The companies mentioned as suspects have all refuted the allegations.
Numerous companies the SEC contacted about crypto yield products
The Securities and Exchange Commission (SEC) has contacted them. Regarding crypto yield products, according to Gemini spokesperson Carolyn Vadino. We are one of many organizations that the SEC has contacted concerning crypto yield products. As a result of our own initiative, we have agreed to cooperate. With this broad-based industry examination of Celsius Network Crypto.
All discussions with authorities, according to Bethany Davis. A representative for Temperature Control, were kept strictly discreet. “We have always collaborated with regulators in the United States. And around the world to ensure that we operate in strict compliance with the law. As well as we intend to continue to do so,” says the company.
According to Voyager spokesperson Mike Legg, the regulatory environment is rapidly changing. And “it is typical for financial services organizations. Whether they are involved in digital assets or not, to be in constant communication with authorities.” Voyager is a leading provider of digital asset management services.
Gemini, Celsius, and Voyager have not accused of any wrongdoing by the SEC. Or any other regulatory body, and not all agency inquiries end. In enforcement proceedings against the companies. A spokeswoman for the Securities and Exchange Commission declined to comment.
Crypto bankers claim over $40 billion in deposits
As of now, cryptocurrency lenders claim to have received deposits totaling. More than $40 billion. It is fairly similar to ordinary banking accounts in that corporations accept deposits. And pay interest on the funds held in the accounts. The fact that these businesses provide rates. On a variety of tokens ranging from 3 percent. To as high as 18 percent that paid in digital currency is noteworthy. As contrasted to the ordinary bank savings account. Which pays on average 0.06 percent.
Bitcoin accounts, in contrast to bank deposits, not insured by the federal government. Which means that investors run the risk of losing their whole initial investment.
In general, the companies claim that they make money by lending cryptocurrency. To institutional investors who require the tokens in order to execute their own transactions. At even higher interest rates than they would otherwise charge. However, because the companies do not register their products with the government. Regulators have voiced worry that such risks not communicated to investors. In the first place as a result of the lack of registration.