Cryptocurrency lender Nexo US has agreed to a deal with the Securities And Exchange Commission and other state regulators, agreeing to pay a total of $45 million for not registering the business and offering an unregistered product – an interest earning investment.
Nexo Settles With SEC & State Regulators For Unregistered Offering
On January 19, 2023, Nexo announced that it had reached an agreement to settle the charges brought against it by the US Securities And Exchange Commission (SEC), North American Securities Administrators Association (NASAA), as well as various state regulators including the New York Attorney General’s Office. The company was accused of not registering its offer of an Earned Interest Product (EIP) that allows investors to earn interest on crypto assets they deposit.
The SEC stated that the EIP was a security and the offer and sale of it did not qualify for an exemption from SEC registration. In response to the settlement, Nexo co-founder Kosta Kantchev issued a statement: “We are confident that a better regulatory framework will soon emerge… We will be able to deliver products that add value to the United States.” SEC Chairman Gary Gensler had a different perspective on the matter.
“We accuse Nexo of failing to register its retail crypto lending product before offering it to the public, ignoring essential disclosure requirements designed to protect investors,” Gensler said. “Our time-tested public policies are the best. When crypto companies do not comply with the law, we will continue to pursue the facts to hold them responsible. This case is among others. All US investors will be unable to access its unregistered product loan product.”
Nexo co-founder Antoni Trenchev thanked the company’s legal team, Schulte Roth And Zabel LLP, and the New York Attorney General’s Office for helping Nexo achieve the “most favorable” outcome. “We are delighted with this unified resolution which ends all speculation Nexo’s Relationships with the United States. Now we can concentrate on what we do best, creating seamless financial solutions that benefit our global audience.” Trenchev said in a Thursday statement.
The agreement closes all investigations into Nexo, with the agreements on a “no admit, no deny” basis. This follows investigations initiated by Bulgarian Law enforcement officers into Nexo’s deals, which the crypto lender vehemently denies.
What do you think about the outcome of the Nexo settlement and its effect on the regulatory environment for crypto companies in the United States? Please share your thoughts in the comments section!
