SEC Chair Gary Gensler Suggests Celsius was ‘Too Good to be True’

Gary Gensler suggested crypto lending firms like Celsius offering up to 20% yield are too good to be true, and that investors should ask themselves how that is possible, in a Yahoo Finance interview on Thursday. 

“You got to sort of think if you’re an investor, if it’s too good to be true, it probably is,” Gensler said. 

While Gensler didn’t directly reference Celsius claiming these sorts of returns, he said any crypto lending firm offering “four, seven, eight, 10 and even 20% returns” are most likely offering something that they’re not capable of providing.  

In addition, Gensler noted that certain firms are not fully disclosing the risks involved with investing with them. He believes that American investors should have the opportunity to invest into whatever they believe in, but said these lending firms and other financial corporations are responsible for providing those investors with complete and realistic disclosures. 

“The public benefits by knowing full and fair disclosure and that somebody is not lying to them,” Gensler said. “You know, basic protections.” 

When asked about whether crypto exchanges should operate under the same rules as traditional finance, Gensler suggested that they are subjected to those same laws and rules but are noncompliant. He then talked about BlockFi, who settled with the Securities and Exchange Commission (SEC) early this year, saying it was determined they were a noncompliant, unregistered investment company. Gensler noted that BlockFi had over 670,000 investors with $17 billion in crypto. 

Gensler made it clear exactly what an investment company is: if you’re pulling public assets together, you’re an investment company and must follow regulations as such. 

“We do have robust laws and rules at the SEC…but the public is not protected largely because of the noncompliance in the space,” Gensler said. 

Gensler concluded the interview outlining exactly what he and his team do at the SEC. 

“We at the SEC are working in each of those 3 fields: exchanges, lending and the broker dealers,” Gensler said. “And talking to industry participants about how to come into compliance, or modify some of that compliance.” 

He believes one of the missions of the SEC is to protect investors and he believes that having more crypto platforms come into compliance with current regulations will do just that. He also mentioned that stablecoins are one of those categories they are looking at more in detail, but that they ultimately are a part of a broader ecosystem that needs protection. 

Author: Tyler Irvin

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