Crypto Lender NEXO Faces Cease-and-Desist Order From California
All-in-one cryptocurrency platform Nexo has received a cease-and-desist order in the U.S. state of California.
The desist-and-refrain order which was filed by California's Department of Financial Protection and Innovation (DFPI) alleges that Nexo has offered and sold "unqualified securities" through the program in violation of California's Çooperation Code.
The DFPI estimated in the document that as of July 2022, over 18,000 California residents have accounts in the program and hold investments of at least $174.8 million. However, Nexo has not registered with the state regulator to offer these investment services to Californians.
"The Commissioner has issued no permit or other form of qualification authorizing Nexo, Nexo Inc., or Nexo Capital Inc. to offer or sell securities, including Earn Interest Product accounts, in California. Nor are the offers and sales of these securities excepted, exempt, or otherwise not subject to qualification," the document said.
Securities regulators in seven other states including New York, Kentucky, Maryland, Oklahoma, South Carolina, Washington, and Vermont all simultaneously filed their own administrative actions against Nexo.
In a statement, the Attorney General of New York, Letita James said that her office was suing the lender for failing to register as a securities and commodities broker despite warnings, and also misrepresenting to investors that they are a licensed and registered platform. James intends to compel Nexo to also forfeit all revenue it earned from operating in the state.
"Instead of misleading New Yorkers about its compliance with the law, crypto platforms must register to operate just like other investment platforms," she added in a tweet.
According to a
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