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US securities watchdog works to register crypto lending firms


US SEC scrambles to register crypto lending firms

The U.S. Securities and Exchange Commission (SEC) is working to properly register some crypto-lending companies if they operate more like investment firms, the head of the Wall Street regulator told CNBC on Thursday in a statement. interview.

SEC Chairman Gary Gensler also said that it is up to big financial institutions to decide if they want to include crypto options in their portfolios for clients, but the risks of crypto tokens should be made public.

“We focused on this area because many of these companies … could well be investment companies taking hundreds of thousands or millions of client funds, pooling them, then returning them while offering fairly high returns. It looks a bit like an investment company, or a bank, you might say,” Gensler said.

“How do they do this? What is behind these promises? We will work with the industry to ensure these companies are properly registered under securities laws.”

Cryptocurrency companies said they remained uncertain about U.S. regulations governing products that allow customers to earn interest on holdings instead of trading them.

Attention to crypto markets has intensified again since May amid recent bouts of volatility that have long alarmed watchdogs.

Several crypto lenders have stumbled in recent weeks amid falling crypto prices. Celsius Networks has filed for bankruptcy. BlockFi has signed a deal with FTX that gives the crypto exchange the ability to buy BlockFi for up to $240 million.

Firms exposed to cryptocurrencies have previously warned that declines in token prices could have ripple effects, including triggering margin calls.

Meanwhile, as the US Federal Reserve began raising rates to fight inflation, investors fled the crypto markets.

Thursday’s comments follow Gensler’s repeated statements that, in his view, certain crypto trading platforms may meet the definition of “securities” and should be traded and regulated as such.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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