Crypto Firm Nexo Pays Out $45 Million in Settlement with SEC, Shutters Lending Product
Crypto lending company Nexo has agreed to pay a total of $45 million to US regulators to settle claims that it failed to register the sale of its Earn Interest Product (EIP).
According to two separate statements by the US Securities and Exchange Commission and the North American Securities Administrators Association, Nexo has agreed to pay a $22.5 million penalty to each of these regulators, or a total of $45 million to settle charges that it violated investor-protection laws.
The crypto lender has also agreed to cease its offer and sale of the EIP to U.S. investors, the SEC said.
Nexo began offering its interest prdocut to US custoerm in June 2020. The product allowed users to tender their crypto assets in exchange for industry-high interest rates. The SEC claims the product is a security and thus Nexo should have registered with the agency.
"We are not concerned with the labels put on offerings, but on their economic realities. And part of that reality is that crypto assets are not exempt from the federal securities laws,” said Gurbir Grewal, Director of the SEC’s Division of Enforcement, adding:
“If you’re offering or selling products that constitute securities under well-established laws and legal precedent, then no matter what you call those products, you’re subject to those laws and we expect compliance.”
Launched in 2018, Nexo is a British digital asset lending company that loans out client funds and uses the proceeds to pay interest. The company first went head to head with US officials in September 2022 after several states, including California, Vermont, Oklahoma, South Carolina, Kentucky, and Maryland, filed cease-and-desist orders against the company.
In a press release, Nexo said the settlement is on a
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