Gensler says SEC should be regulating crypto lending companies as well, indicating that they are already watching these companies very closely so let’s have a closer look at our latest cryptocurrency news today.
The SEC chair Gary Gensler says SEC should be regulating crypto lending companies and that they all fall under the scope of the securities regulator. He noted that the lending companies offer returns as high as 10% and compared these companies to investment companies but Gensler didn’t comment on the Celsius failure though the reports suggest the SEC is looking into the matter.
The SEC chair Gary Gensler said that the lending companies can be compiled to register with the SEC. Gensler said that the crypto lending companies might well be an investment company hundreds of thousands or millions of customer bonds and pull it together and then re-lend it so these activities will bring the companies under the purview of the SEC:
“It sounds a little like an investment company, or a bank, you might say.”
Gensler added that the lending companies are offering high returns and said that the SEC aims to find out how companies are making high offers and what exactly stands behind these promises. To that end, the SEC aims to have crypto lending companies register under the securities laws so the regulator will work with the industry to protect the public.
CNBC asked Gensler whether the SEC will pursue a litany of the type of settlement and deals and gave the recent failure of Celsius which filed for bankruptcy this past month. Gensler didn’t discuss Celsius specifically and the SEC investigated the company. Alabama Securities Commission Director Joseph Borg said that the SEC is in contact with Celsius over the decision to suspend the withdrawals. The two companies adjacent to Celsius failed as well, lending company Voyager Digital already filed for bankruptcy while 3aC filed for bankruptcy right after. The SEC announced an investigation into both companies.
The US SEC Chair Gary Gensler says crypto lenders and lending companies offered unrealistic yields. He referenced yields on deposits ranging from 4% to 20% that were offered by plenty of companies and marketed to the investors as safe.