The U.S. SEC has been scrutinizing several crypto firms because of an inquiry into companies paying interest on virtual token deposits, Bloomberg reports.
The companies under the microscope include Celsius Network, Voyager Digital Ltd. and Gemini Trust Co.
The review will focus on whether the companies’ offerings will have to be registered as securities with the watchdog.
The firms have the ability to pay customers higher rates than many bank savings accounts because they lend out their digital coins to other investors, which is a practice the SEC says raises concerns about investor protection.
The probes have only compounded the uncertainty for the sector, which has had to deal with lagging coin prices and regulators trying to put up new rules.
“We are one of many companies the SEC has reached out to regarding crypto yield products,” Gemini spokeswoman Carolyn Vadino said in a statement. “We are cooperating voluntarily with this industry-wide inquiry.” “All discussions with regulators are confidential,” said Bethany Davis, a spokeswoman for Celsius. “We always have, and will continue to, work with regulators in the U.S. and globally to operate in full compliance with the law.”
Mike Legg, a spokesman for Voyager, said the regulatory environment has been evolving rapidly and that it’s “normal” for financial services companies to be in these types of regulatory discussions.
Another crypto lender, BlockFi, is also among those facing SEC scrutiny, with both Celsius and BlockFi having been the subject of enforcement actions from regulators.
PYMNTS wrote recently that the Biden administration might be considering hiring a new crypto regulator, with reports saying this week that Biden plans to put out an executive order as soon as February to put together an outline of a national crypto strategy. This would not be a final thing – it will still need a lot of government agencies to add input by the second half of this year.
See also: Does Biden’s Executive Order Hint at New Federal Crypto Regulator?
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