The U.S. Securities and Exchange Commission (SEC) is investigating several cryptocurrency firms that offer high interest yields as part of a broader government effort to regulate digital assets.
According to a new Bloomberg report, the SEC specifically Celsius Network (CEL), Voyager Digital Ltd. and Gemini Trust Co. under scrutiny. Regulatory users are concerned with the methodology that firms use when paying interest on virtual tokens deposited by investors.
While traditional financial institutions offer savings account holders less than one-tenth of a percent in yield, the report states; He states that crypto token interest rates range from 3% to 18%. Bloomberg explains the inequality this way:
“Firms can lend their digital currency to other investors, paying customers higher rates than most bank savings accounts…
But because companies do not register their products with the authorities, regulators are concerned that potential risks are not fully disclosed to investors.”
The US states of Texas and New Jersey each took legal action against Celsius Network in September, but so far the SEC has not accused it or the other two companies of wrongdoing.
Gemini is a crypto exchange founded in 2015 by twins Cameron and Tyler Winklevoss, who rose to fame as a result of their discussions with Mark Zuckerberg over Facebook, now Meta.
Regarding the SEC investigation, Voyager spokesman Mike Legg said:
“Whether it is related to digital assets or not, it is normal for financial services companies to be in constant dialogue with regulators.”
Regulations on crypto seem to be gaining momentum; Just this week, news emerged that the White House plans to take action to regulate digital assets, including a possible executive order, as reported by KoinFinans.
A few days ago, the Federal Reserve released a report outlining the pros and cons of central bank digital currencies, often referred to as CBDCs.