Nexo cease its business operations in the United States

abdelaziz Fathi

UK-based crypto lender Nexo said on Monday it will halt offering its products and services in the US market as of April 1, 2023 after costly clashes with regulators.

Nexo Card

The crypto lender says that the decision to cease its business operations is influenced by the regulatory and policy landscape in the United States.

The move comes after Nexo paid $50 million in fines to settle charges from the federal and state regulators for failing to register its crypto asset lending product. Nexo reached a resolution with the Securities and Exchange Commission in January after facing cease-and-desist orders from multiple states over its interest-earning products.

The lender settled the charges without admitting wrongdoing that its Earn Interest Product (EIP) was an unregistered securities offering.

“As you are a US client, we ask that you begin planning the withdrawal of your funds at a convenient time by this date. Between now and April 1, 2023, your balances on Nexo will continue to receive the same interest rate as that of the date of Nexo’s landmark resolution in the US (January 19, 2023). This does not affect Nexo’s other services, which are fully functioning and processing transactions in real time as always, in order to support you in this transitional period,” the company said in a blog post.

Nexo advises customers who believe that their account was wrongfully flagged as US-based to update their verification details.

Eight US state regulators highlighted that Nexo promotes annual interest rates of up to 36% on crypto deposits, which are significantly higher than rates for short-term, investment-grade, fixed-income securities or bank savings accounts.

Nexo replied to these allegations, elaborating that since the SEC guidance on earn products in February 2022, it has voluntarily ceased the onboarding of new US clients for Earn Interest Product as well as stopped the product for new balances for existing clients.

The move comes as US regulators signaled a big change in policing cryptocurrencies and the growing Defi sector after the FTX stunning collapse. The SEC officials have increasingly been talking about a need to crack down on these products, which are essentially unregistered interest-bearing accounts, the agency claims.

SEC’s head Chair Gary Gensler called on Congress to give the agency more authority to better police crypto trading and lending platforms, which pay customers rates higher than most bank savings accounts.

Read this next

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

<