Cryptocurrency lender Nexo has agreed to pay $45 million to the US Securities and Exchange Commission (SEC) and various state regulators after charges were brought against the firm for failing to register the Interest Earning Product ( EIP) of the company. Nexo explained that the agreements are on a “no admit, no deny” basis and that the agreement “closes all multi-year investigations into Nexo.”
Nexo pays $22.5 million to SEC, $22.5 million to various state regulators for EIP offer
On January 19, 2023, Nexo announced that it has agreed to settle with the US Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), and various state regulators, including the New York Attorney General’s Office, on an unregistered offer.
According to the SEC, around June 2020, Nexo began offering the company’s Earn Interest Product (EIP), an interest-bearing product that allows investors to earn interest on deposited crypto assets. The American regulator saying“the EIP is a security and that the offer and sale of the EIP did not qualify for an exemption from registration with the SEC.”
Nexo co-founder Kosta Kantchev responded to the deal in a statement sent to Bitcoin.com News. “We are confident that a clearer regulatory landscape will soon emerge, and companies like Nexo will be able to deliver products that create value in the United States in a consistent manner, and the US will further cement its position as the global engine of innovation. Kantchev said. SEC Chairman Gary Gensler described the deal differently.
“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. “Compliance with our time-tested public policies is not an option. When crypto companies fail to comply, we will continue to follow the facts and the law to hold them accountable. In this case, among other actions, Nexo will stop offering its unregistered loan product to all US investors.”
Nexo co-founder Antoni Trenchev thanked the company’s legal team of Schulte Roth and Zabel LLP and said the New York Attorney General’s Office helped Nexo secure this “most favorable” outcome. “We are pleased with this unified resolution that unequivocally ends all speculation regarding Nexo’s relations with the United States. Now we can focus on what we do best: creating seamless financial solutions for our global audience,” Trenchev said in a statement on Thursday.
Nexo’s settlement with US regulators follows the recent investigation into Nexo’s dealings launched by Bulgarian law enforcement officials. The crypto lender, however, vehemently denies accusations stemming from the Bulgarian Prosecutor General.
What do you think about the outcome of the Nexo deal and its impact on the regulatory landscape for crypto companies in the United States? Share your thoughts on this topic in the comments section below.
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