Nexo buys stake in Texture Capital amid crackdown on crypto lending
Cryptocurrency lending firm Nexo Financial had acquired a stake in SEC-regulated Texture Capital in a move that will clear the path for it to offer new services through a registered broker-dealer arm.
The transaction comes barely three weeks after the New York Attorney General’s Office reportedly accused Nexo of offering unregistered services to local residents. The state authority directed Nexo and another crypto lender, Celsius, to cease operations in October, citing failure to register the business in New York and performing unlawful activities.
As such, the acquisition puts Nexo on a firmer regulatory footing with the Securities and Exchange Commission and positions it to offer a broader range of products, including blockchain-based securities. It also allows the platform to perform all operations in a regulatory compliant manner.
Texture Capital is a boutique blockchain firm that offers corporate advisory and capital services. Its popular institutional marketplace helps firms raise capital via a digital security offering and enable their investors to trade the tokenized securities.
Texture streamlines the current market structure for private placements, supporting the primary issuance and secondary trading through a regulated broker-dealer along with functioning as an Alternative Trading System (ATS).
Commenting on the news, Tatiana Metodieva, Head of Corporate Finance and Investments at Nexo said: “Nexo invests actively across geographies and segments to expand its strategic presence, technological solutions framework, and regulatory readiness in the digital asset ecosystem. Texture’s growth strategy, service orientation, and compliance foresight align well with Nexo’s vision for the US market. We expect this partnership to further strengthen Nexo’s commitment to state-of-the-art execution and service to its community.”
“We are delighted to welcome Nexo as an investor in our seed round. Nexo has built an impressive, global crypto business, and we look forward to partnering with them as Texture continues to build on our vision to revolutionize capital markets leveraging blockchain technology and DeFi,” added Richard Johnson, CEO and Founder of Texture Capital.
The recent investment allows Nexo to utilize the acquired firm’s capabilities to create a turn-key solution for an alternative trading system which facilitates transactions in securities that are not publicly-traded.
Although it is unclear if Nexo was actually one the two companies the NYAG letter referred to, there has been a wave of regulators clamping down on crypto lending platforms. This summer, Celsius and BlockFi received cease-and-desist orders from state securities regulators.
Nexo, however, responded to the regulator’s claims saying that it doesn’t even offer lending and borrowing products in New York and that there was likely a mix-up.
