Crypto Lender Nexo Pays $45M Fee In SEC Setttlement
• January 21, 2023 6:13 pm • CommentsCrypto lender Nexo is known as one of the crypto industry’s largest lending platforms and it was just announced that the company will have to pay $45M as part of a settlement with the SEC.
The SEC has recently focused its attention on crypto-lending platforms and had accused Nexo for failing to register its Earn Interest Product (EIP).
This is not the first time that the SEC has targeted lending platforms and it now seems to be the trend where all lending platforms are under high regulatory scrutiny.
Therefore, investors should be cautious if they are dealing with crypto-lending assets on these platforms as there is the risk of regulatory intervention.
Whether or not these actions by the SEC will actually be effective at protecting investors in another story, but it seems that this will not change under Gensler’s leadership.
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
CoinTelegraph reports:
SEC Chairman Gary Gensler said:
“We charged Nexo with failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors.”
“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,” he added.
While the firm didn’t categorically admit or deny the findings from the SEC’s investigation, Nexo’s settlement came on the back of a cease-and-desist order agreement prohibiting the firm from violating any provisions of the Securities Act of 1933.
NASAA also explained that the investigation was conducted by at least 17 separate state securities regulators, who agreed to the terms set out in Nexo’s settlement.
It is unclear at this point on whether or not it will have any major impact on the broader crypto market.
Nexo was founded back in 2018 so it is considered quite an established digital asset platform that sells “Earn Interest” products.
Additionally, there are many such platforms that offer similar services as well so it is possible that Nexo was specifically targeted.
With that being said, the crypto market is continuing its recent bull rally where Bitcoin recovered to around $23k which was the highest since the FTX collapse.
This comes even during a time when many investors expect more regulation to come to the industry due to the bankruptcy of major crypto firms.
Nexo fined $45 million by US SEC
January 19, 2023https://t.co/upxsthb8Xv pic.twitter.com/fgxcF29Tih
— web3 is going just great (@web3isgreat) January 21, 2023
DeCrypto.co concludes:
While Nexo agreed to the settlement, the company says the settlement is on a no-admit-no-deny basis, claiming in a press release that U.S. Federal Regulators did not accuse the company of engaging in fraud or misleading business practices.
“We are content with this unified resolution which unequivocally puts an end to all speculations around Nexo’s relations to the United States,” Nexo co-founder Antoni Trenchev said in a press release.
“We can now focus on what we do best – build seamless financial solutions for our worldwide audience.”
JUST IN: Nexo pays $45 million to settle SEC and state charges for failing to register lending product
— whalechart.org (@WhaleChart) January 19, 2023
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