SEC: crypto lending services deceive customers

According to the head of the SEC, crypto lending services offer unrealistic profitability for customers

According to us SEC Chairman Gary Gensler, existing platforms for cryptocurrency lending mislead customers. He believes that they are obliged to provide them with all information and it must be reliable.

Gary Gensler is sure that those Platform, providing lending services in cryptocurrencies, and promising a yield of 4 to 20%, are doing wrong.

What exactly is the criticism of the head of the SEC aimed at?

In an interview with Yahoo finance.

Gary Gensler reported that lending platforms offering loans in cryptocurrency offer unrealistic returns. According to him, the yield from 4 to 20% is too good to be true. The reason is that such transactions are associated with huge risks.

Therefore, cryptocurrency platforms must necessarily disclose all information to their customers before they decide to invest in them. Gensler points out that investors of course decide for themselves what risk they can take. In turn, platforms offering loans in cryptocurrencies and other services in the field of digital assets should disclose all information to them. And this applies to the entire industry, and it does not matter whether the investor is engaged in the purchase of cryptocurrency or securities, etc.

In particular, Gensler recalled the situation with the cryptocurrency lender BlockFi. He was fined $100 million. In June of this year, the Iowa regulator additionally demanded $ 1 million from the lender. The platform’s problems arose because it did not provide its customers with all the information.

What will the SEC require next?

Gary Gensler points out that exchanges, lenders, brokers will consult with the SEC in order to comply with all the requirements of the Securities Commission in the future. In addition, the SEC will interact with the CFTC and other banking regulators. It is worth recalling that Gaensler considers Bitcoin a commodity, but in relation to other cryptocurrencies, he does not have such a position.

Thus, the SEC wants to further tighten the requirements for all participants in the cryptocurrency market, so as not to provoke such situations as happened with the infamous TerraUST. It remains only to wait for the moment when it is the credit cryptocurrency platforms that will begin to comply with the requirements of the SEC.

Author: Vadim Gruzdev, Analyst Freedman Club Crypto News