Nexo Settles with SEC and States Over Unregistered Securities
Crypto lending platform Nexo has reached a settlement with the U.S. Securities and Exchange Commission (SEC) and several state regulators. The company will pay $45 million to resolve allegations about unregistered securities.
Nexo neither admitted nor denied the SEC's findings. Instead, it expressed hope for clearer regulations in the crypto industry. The settlement requires Nexo to stop selling its Earn Interest Program (EIP) to U.S. investors. Half of the settlement amount, $22.5 million, will go to the SEC, with the rest representing fines from state-level regulators.
Nexo previously ceased its USA operations in December 2022 following failed negotiations with regulators. This is not the first such case; earlier, BlockFi paid $100 million to the SEC for similar violations involving its interest-bearing account product. Eight state regulators filed administrative actions against Nexo in September, with Thursday's settlement marking a resolution with several of them. Nexo marketed its EIP as a way for investors to earn interest on crypto, using investor assets for its own business.
The settlement with the SEC and state regulators is a significant development in the ongoing regulatory scrutiny of the crypto industry. It highlights the importance of compliance with securities laws and the potential consequences of failing to do so.
