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The U.S. Securities and Exchange Commission (SEC) is reportedly looking into some of the high-yield crypto lending products offered by Gemini, Celsius Network and Voyager Digital.
According to a report published in Bloomberg, the SEC is conducting an inquiry into digital asset lending services. The focus of the investigation would be on whether crypto lending services could be considered securities and therefore must be registered with the Commission.
Gemini and Celsius did not immediately reply to the request for comments of cointelegraph.
The sector's primary concern would be the high-yield supply of crypto lending services, which are often significantly higher than most savings banks. The interest rates offered by crypto lending services range anywhere from 3% to 18%, while traditional banks' savings accounts offer less than 0.1%.
Bank savings accounts are insured by the Federal Deposit Insurance Corporation, which means investors are protected from bank failures and theft. However, crypto lending services lend clients' digital assets to other investors, which, according to the sec, raises questions of investor protection. It is important to note that the sec did not charge businesses with any wrongdoing.
Related: Crypto lending firms on the hot seat: New regulations are coming?
Cryptographic loan services have been subject to regulatory enforcement measures in the United States since September 2021. State regulators from New Jersey and Texas issued cease and desist orders against Celsius Network.
In October 2021, the New York Attorney General's Office (nyag) clamped down on Celsius and Blockfi, ordering them to shut down their services. The NYAG alleged wrongdoing and issued a cease and desist order against the platforms. Coinbase, the leading American crypto exchange had to shut their crypto yield product even before launch after SEC threatened a lawsuit.
