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Nexo agrees to pay $45M to SEC and discontinue crypto lending program in US

Winnie Kimeu

Writer, News

Jan 20, 2023 at 12:28

Nexo Capital has had a wild week.

The Securities and Exchange Commission delivered a crushing blow on Thursday, charging Nexo with selling securities that were not registered. The SEC stated that the company had failed to obtain the necessary clearance before launching their product, “Earn Interest.”

SEC’s Gary Gensler Sees Plenty of ‘Noncompliance’ Across Crypto Industry
SEC’s Gary Gensler Sees Plenty of ‘Noncompliance’ Across Crypto Industry

To save face, Nexo has reached a settlement with the SEC – to stop the interest program and bear the financial burden of a $22.5 million penalty. Furthermore, an additional sum of $22.5 million will be forked out to settle with state regulators.

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As per the filing submitted by the SEC, the “Earn Interest” program was mandated to register its offer and sale, which it failed to comply with.

“We are content with this unified resolution which unequivocally puts an end to all speculations around Nexo’s relations to the United States,” Nexo co-founder Antoni Trenchev said in a press release. 

Nexo co-founder Antoni Trenchev
Nexo co-founder Antoni Trenchev

“We can now focus on what we do best – build seamless financial solutions for our worldwide audience.”

Unlucky in the US

Nexo introduced its “Earn Interest” product in June 2020. 

Several states across America, including California, Vermont, Oklahoma, South Carolina, Kentucky, and Maryland, took legal action against the company by filing cease-and-desist orders by September 2022.

In the same month, Nexo made a daring move by revealing that it had taken a stake in Summit National Bank, a US federally chartered bank located in Wyoming.

Nonetheless, Nexo declared that it would be shutting down its U.S. operations, citing that it had reached a “dead end” with regulators in December 2022.

Nexo 'Earn Interest' Program
Nexo ‘Earn Interest’ Program

“It is now unfortunately clear to us that despite rhetoric to the contrary, the U.S. refuses to provide a path forward for enabling blockchain businesses, and we cannot give our customers confidence that regulators are focused on their best interests,” Nexo.

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