The securities regulator said in a statement that Nexo agreed to pay a cumulative fine of $45 million. It includes a $22.5 million fine for offering and selling the product to American investors.
The platform will also pay an additional $22.5 million to resolve similar claims brought by state regulatory authorities.
Today we charged Nexo Capital Inc. with failing to register the offer and sale of its retail crypto asset lending product, the Earn Interest Product (EIP). To settle charges, Nexo agreed to pay $22.5 million and cease its unregistered offer and sale of the EIP to U.S. investors. — U.S. Securities and Exchange Commission (@SECGov) January 19, 2023
Nexo Earn Product Deemed a Violation
As per the SEC’s directive, Nexo started to market and sold its Earn Interest Product (EIP) in the United States in and around June 2020. The product assured the holders that Nexo would pay interest on it. However, according to the order, Nexo used this opportunity to use investors’ crypto assets in a variety of ways to both fund interest payments and generate income for its own business.
The SEC alleges that the EIP is a security, and its sale and offer did not meet the requirements for an exemption from SEC registration.
SEC Chair Gary Gensler said, “Compliance with our time-tested public policies isn’t a choice. Where crypto companies do not comply, we will continue to follow the facts and the law to hold them accountable. In this case, among other actions, Nexo is ceasing its unregistered lending product as to all U.S. investors.”
However, the platform has neither accepted nor denied the allegations. The SEC says that it has only agreed to the agency’s cease-and-desist order.
Departure From US Markets
Last month, Nexo announced a “regrettable but necessary decision” of gradually discontinuing its goods and services in the U.S. over the upcoming months. Meanwhile, according to Nexo’s website , EIP is unavailable for residents of a few countries, including the USA, Bulgaria, and Estonia.
Nexo has reached a final landmark resolution with the U.S. Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), consisting of all 50 U.S. States & 3 territories and the Attorney General of New York.
License.
