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US SEC has recently appointed Gurbir Grewal as new enforcement director at the commission
Crypto lending has turned out to be an effective alternative to the loan provisions in the traditional financial system. Also, it’s not an undeniable fact that the number of frauds and cheating in the sector is also huge. Even the authorities and regulators keep extra skepticism when it comes to crypto lending.
Newly appointed enforcement director at SEC, Gurbir Grewal in an interview said that the Securities and Exchange Commission is not going to give another chance to crypto lending firms if they are found guilty of violating any crypto regulation. The statement is being seen to come as the wake of the recent settlement agreement by cryptocurrency exchange BlockFi, worth $100 million.
Gurbir in his statement said that SEC’s message to crypto lending firms is not that they can register their product and commission will just ignore the billion dollar worth of capital they have under their management in crypto lending product and commission also will ignore their violations of security laws.
Enforcement director said that the commission’s message is that they will see their conduct more favorably if it would need to. And if it came to their knowledge about any regulations violations or some kind of wrongdoings, specific measures will be taken including penalties, and finding paths to comply with security laws. These are even soft actions that would be taken in the case of self reporting of violations by crypto entities.
Since the cryptocurrencies started becoming more relevant and mainstream, it’s use cases also increased. Crypto lending is such a use case of crypto that works just like traditional loans work. Here lending and borrowing is done on a platform that runs on smart contracts. Crypto users who have digital assets in their possession can avail them for lending and earn interest on their assets.
Borrowers of crypto need to collateral some assets value of 125% to 150% of their borrowing amount, depending upon the platform and digital assets. BlockFi and Celsius are one of the leading and biggest crypto lending platforms which crypto users generally use to yield interest on top of their crypto holdings.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
