Nexo pays $45 million fine to SEC for not registering loan product

The SEC has imposed a $45 million fine on lending platform Nexo for offering unregistered crypto lending products.

Nexo paid a $45 million fine to the SEC for not registering a loan product โ€“ Photo: CryptoSlate

Nexo has agreed to pay a $45 million fine to federal and state agencies after being charged by the U.S. Securities and Exchange Commission (SEC). Unauthorized offering of products to earn interest (Earn Interest) in September 2022.

Specifically, the lending platform will pay the SEC $22.5 million in fines and agree to stop providing interest-earning products to US investors, according to a statement. In addition, Nexo also agreed to pay an additional $22.5 million to mediate similar allegations brought by state regulators. Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said that crypto assets are not exempt from federal securities laws.

Back in 2020, Nexo began offering and selling the Earn Interest product in the US. This product enables investors to deposit crypto to Nexo in exchange for a passive interest. Nexo then used the investor’s assets in a variety of ways to generate income for its own business and to pay investors interest.

However, Nexo did not acknowledge or deny the allegations, but agreed to discontinue the interest rate product, subject to the Securities Act of 1933.

Kosta Kantchev, co-founder of Nexo shared:

โ€œWe believe that a clearer regulatory landscape will soon emerge and that companies like Nexo will be able to deliver value-creating products in the United States in a compliant manner, and the United States will further strengthen its position in the United States. position as the world’s innovation engine.โ€

Nexo said it will leave town US market last December, citing a “failure” to negotiate with US regulators.

Recently, the SEC touched Gemini and Genesis on January 12 under similar accusations to Nexo. Experts at that time thought that the SEC’s moves were a signal warning to other exchanges and actors that are also providing profitable products.

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