New SEC rules to ban digital asset operators from offering earn products?

The financial losses suffered by investors following the collapse of crypto lending firms such as BlockFi and Celsius prompted the Securities and Exchange Commission (SEC) to issue rules back in February 2022 restricting “digital asset business operators” (i.e. crypto businesses licensed under Thailand’s Emergency Decree of 2018 on Digital Asset Businesses) from offering services that generated financial returns on deposited digital assets on behalf of their customers. Such services may be referred to as “earn products”, since they allow customers to earn interest on their digital assets and are an example of a general category of crypto products and services known as “decentralized finance” or “DeFi”. The SEC has now recently issued new rules that clarify and expand on the earlier restrictions on earn product offerings by regulated businesses in…