Breaking: SEC Chief Issues Stern Warning Against Crypto Lending Products

Published by
Breaking: SEC Chief Issues Stern Warning Against Crypto Lending Products

The US Securities and Exchange Commission (SEC) is tightening its regulatory noose around the crypto market. Gary Gensler the current SEC chief in a recent interview to Financial Times issued a stern warning against crypto lenders claiming any platform offering such services cannot avoid regulations.

Gensler said investors in the crypto market deserve the same kind of protection that many enjoy in the traditional market. He explained,

“This crypto space is now certainly of a size that without those investor protections of banking, insurance[and] securities laws [and] market oversight, I do think somebody is going to get hurt,” he said. “A lot of people are likely to get hurt.”

The controversy around crypto lending products began with Coinbase which revealed it had been threatened with a lawsuit over its unreleased stablecoin lending product by the SEC. The crypto exchange in an official blog post blasted SEC for not offering clarity around the security regulations and reasons as to why their product is a security. The leading crypto exchange later decided to drop its lending product plans in a hush-hush manner.

Advertisement

The Fate of Crypto Lenders Remain Uncertain

Coinbase has dropped its plans of crypto lending services after 6-months of failed talks with the SEC, the real focus is now on core cryptos lending platforms such as BlockFi, Celsius, crypto.com, and several others. Celsius is also facing the wrath of regulators in three states and looking at the aggressive stance of SEC it might extend to other similar service providers.

While SEC claims it is open to discussions with service providers, Coinbase’s experience suggests its quite opposite. Gensler in particular who was being hailed as the crypto hero before taking over from Jay Clayton is proving to be a bigger roadblock for crypto innovation.

SEC chief continues to reiterate his stance about the need for tighter regulations to ensure investor protection without offering much clarity on how the SEC plans to do it. Many former regulatory chief and lawmakers including Pat Toomey has called for more clarity from Gensler and SEC.

 

Advertisement

Share
Prashant Jha

An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • 24/7 Cryptocurrency News

XRP News: mXRP Vault Surpasses $22M as Investors Capitalize on Staking Rewards

Axelar and Midas's mXRP vault has surpassed $22 million in deposits within days of launch.…

September 27, 2025
  • 24/7 Cryptocurrency News

Galaxy Digital CEO Calls Next Fed Chair Bitcoin’s Bull Catalyst, Sets $200K BTC Target

Galaxy Digital’s CEO believes that the appointment of the next Fed chair could trigger Bitcoin…

September 27, 2025
  • Bitcoin News

Experts Claim Bitcoin Crash to $94,334 Ahead As BTC Dominance Rebounds

Bitcoin (BTC) price is seeing strong selling pressure, correcting another 6% over the past week…

September 27, 2025
  • 24/7 Cryptocurrency News

Expert Explains Pi Network–Sign Meeting, Says It Could Trigger Binance Listing

The Pi Network has been gaining attention in light of its recent partnership with blockchain…

September 27, 2025
  • 24/7 Cryptocurrency News

Is Trump Family, Mr. Beast Buying ASTER Token? Rumors Gain Strength

The ASTER Token is gaining momentum as rumors circulate that prominent figures like the Trump…

September 27, 2025
  • 24/7 Cryptocurrency News

Solana ETF Update: Grayscale, Fidelity, Others Files S-1 With Staking, Approval Expected in Two Weeks

Several major issuers, including Grayscale, Fidelity, and Bitwise, have filed new amendments to their Solana…

September 27, 2025