Crypto exchanges Gemini Trust and Voyager Digital are being probed by US SEC. This probe is part of a bigger investigation to scrutinize crypto companies paying interest on digital token deposits. Bloomberg posted this news report on Wednesday, citing unknown sources.
Not Accused of Any Wrongdoing
At this time, SEC is not blaming any firm for wrongdoing. It is only investigating if the offers made by these companies should be filed as securities. These firms can pay a high-interest rate compared to what banks offer on saving account deposits. The crypto companies can lend tokens to investors. The Bloomberg report said that Voyager, Celsius, and Gemini had issued statements that they are cooperating with SEC in this probe. The department had, in September, threatened to file a case against Coinbase crypto exchange’s proposed lending plan. Subsequently, Coinbase dropped the plans to offer lending services to its users.
The Companies Must Be Registered As Securities
The SEC is of the view after scrutinizing the offerings of these companies that they should be registered as securities. The firms are promising to offer better rates than what banks offer on savings accounts. Investors can lend their digital assets to other crypto investors. The lending plan with an interest component has been under the scrutiny of many states. They have raised concerns and want to protect the investors. These probes have added uncertainty to this growing business sector.
The industry is already battling low cryptocurrency prices, with bitcoin falling by 50% from its all-time high. Regulators are also looking to place guardrails around different digital assets.
