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US Crypto Lending Services Under the Microscope by SEC

US Crypto Lending Services Under the Microscope by SEC

Gemini, Celsius Network, and Voyager Digital are reportedly being inspected by SEC due to their crypto lending services that offer high yield rates.

Crypto staking has become a popular way to utilize unused digital assets and earn interest over time. In fact, crypto lending platforms offer much higher interest rates than traditional banks. 

However, based on the report by Bloomberg, the US Securities and Exchange Commission questioned if platforms like Gemini that offer crypto lending should be considered as securities, because staked cryptocurrencies are lent to other investors. 

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Staking is basically locking digital assets on a platform like Celsius Network for a set time, which are then lent to investors, and earning interest after the time has passed. 

Average interest rates for crypto staking platforms range from 10% to 20% per year, which is a whole of a lot more than what banks offer. According to Bankrate, average bank savings account interest rates are 0.06%

While the platforms in question are not under any serious investigation, it is being evaluated if their lending services should be registered with the SEC. 

Chief of Staff at Celsius Network Bethany Davis commented on the investigation, stating that the discussions made with the SEC regulators are sealed for the time being. She added:

"We always have, and will continue to, work with regulators in the U.S. and globally to operate in full compliance with the law."

The same stance was taken by other companies involved in the investigation, and they seem to be voluntarily cooperating with the SEC.

Just a few weeks ago, Gemini acquired a wealth management platform BITIRIA that offers advisors support for managing their clients’ digital assets.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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