SEC Scrutinizing Crypto Firms Over Interest-Paying Services: Report

The U.S. Securities and Exchange Commission (SEC) is probing crypto exchanges Voyager Digital and Gemini Trust and crypto lender Celsius Network as part of a wider investigation into crypto companies that pay interest on virtual token deposits, Bloomberg reported Wednesday, citing unnamed sources.

• The agency is considering whether these firms should file their offerings as securities with the SEC, Bloomberg reported, but the agency is not accusing any of the firms of wrongdoing at this time.
• These companies can pay higher interest rates on these assets than most banks do on savings accounts by lending their tokens to other investors.
• Several states, including Kentucky, New Jersey, Alabama and Texas have separately noted their unease with this practice by Celsius and BlockFi, among other companies.
• Gemini, Celsius and Voyager said they are cooperating with the SEC probe, Bloomberg reported.
• In September, the SEC threatened to sue crypto exchange Coinbase over a proposed lending program. Coinbase subsequently dropped its plans for the lending service.