(Bloomberg) -- The U.S. Securities and Exchange Commission is scrutinizing cryptocurrency firms Celsius Network, Voyager Digital Ltd. and Gemini Trust Co. as part of a broad inquiry into companies that pay interest on virtual token deposits, according to people familiar with the matter.

The SEC enforcement review focuses on whether the companies’ offerings should be registered as securities with the watchdog, said the people, who weren’t authorized to speak publicly. The firms are able to pay customers rates higher than most bank savings accounts by lending out their digital coins to other investors, a practice that the SEC and states including New Jersey and Texas have said raises concerns about investor protection.  

The probes add to uncertainty for the burgeoning sector, which is grappling with sharply falling coin prices -- Bitcoin earlier this month plunged 50% from an all-time high -- as well as regulators who are eager to put guardrails around digital assets. BlockFi Inc., another crypto lender, faces SEC scrutiny, Bloomberg reported last year, and both Celsius and BlockFi have been the subjects of earlier enforcement actions by state securities regulators. Those reviews are ongoing, and the firms have disputed the allegations. 

Read More: BlockFi Faces SEC Scrutiny Over High-Yield Crypto Accounts

“We are one of many companies the SEC has reached out to regarding crypto yield products,” Gemini spokeswoman Carolyn Vadino said in a statement. “We are cooperating voluntarily with this industry-wide inquiry.”

“All discussions with regulators are confidential,” said Bethany Davis, a spokeswoman for Celsius. “We always have, and will continue to, work with regulators in the U.S. and globally to operate in full compliance with the law.”

The regulatory environment is evolving rapidly and “it’s normal for financial services companies, digital asset related or otherwise, to be in ongoing dialog with regulators,” Voyager spokesman Mike Legg said. 

The SEC hasn’t accused Gemini, Celsius or Voyager of any wrongdoing and not all agency queries lead to enforcement actions. An SEC spokeswoman declined to comment.  

Crypto lenders say they’ve collected more than $40 billion in deposits. The accounts look a lot like traditional banking, where firms take deposits and pay interest. The difference is these firms offer rates on many tokens of 3% to as high as 18%, paid in digital coins, compared to the average bank savings account that yields 0.06%. Unlike bank deposits, the crypto accounts aren’t federally insured, meaning investors can lose their principal.

The companies generally say they make money by lending out the crypto at even higher rates to institutional investors, who need the tokens to execute their own trades. But since the firms don’t register their products with authorities, regulators have said they worry that potential risks aren’t disclosed to investors.

Read More: What’s ‘Crypto Lending’? Why Are Regulators After It?

Celsius, which has $18.1 billion in deposits, incorporated in the U.K. in 2018 but last year said it would move its headquarters to the U.S. amid regulatory uncertainty. The private company recently raised money from investors including Caisse de Dépôt et Placement du Québec, Canada’s second-largest pension fund, valuing Celsius at more than $3 billion.

Gemini’s crypto exchange was launched in 2015 by Cameron and Tyler Winklevoss, the twins who famously feuded with Mark Zuckerberg over the founding of Meta Platform Inc.’s Facebook. The firm’s “Gemini Earn” crypto accounts pay interest of as much as 8.05%, which the firm says it earns by partnering with third party borrowers whose risk it vets.

New York-based Voyager, which also runs an exchange and had $7 billion in assets under management in November, is listed on the Toronto Stock Exchange and had a market value of about C$1.7 billion ($1.35 billion) as of mid-day Wednesday.

The SEC last year sent Coinbase Global Inc. a letter warning the company would be sued if it moved forward with a lending product, and the company later tabled its plans. Chair Gary Gensler has repeatedly said he believes many crypto firms are selling products that should be registered with the agency -- and has urged firms to come speak with the watchdog about how they should be regulated.

State officials, including those in New Jersey, Texas, Alabama, Vermont, Kentucky and Washington, have brought several enforcement actions against Celsius, BlockFi or both and threatened to ban them from doing business. Regulators in some of those states are now also considering taking similar action against Voyager, according to people familiar with the matter. It’s normal for companies to be in ongoing dialog with their regulators, Voyager’s Legg said. 

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