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.
