Nexo agrees to a settlement with the SEC

Hey Peeps!

On January 19th, Nexo announced, via a press release, that they have reached a settlement with the U.S. Securities and Exchanges Commission (SEC).

The SEC also released a press release announcing the agreement from their perspective.

Nexo was officially charged with "failing to register the offer and sale of its retail crypto asset lending product, the Earn Interest Product (EIP)".

In order to settle the charges with the SEC Nexo agreed to pay a $22.5 million penalty and also will cease operations of it's Earn Interest product.

Nexo went even further and agreed to pay an additional $22.5 million in fines to settle similar charges levied at them by state regulatory authorities.

“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.” - Gary Gensler, Chair of the SEC

Nexo started offering it's Earn Interest Product in the USA back in June 2020.

Through this Earn service, investors would deposit their crypto into Nexo and in return investors would receive a certain amount of interest from Nexo.

However, the SEC claims that "Nexo marketed the EIP as a means for investors to earn interest on their crypto assets, and Nexo exercised its discretion to use investors’ crypto assets in various ways to generate income for its own business and to fund interest payments to EIP investors."

This is the reasoning the SEC provided that Nexo's EIP was a security, and also did not qualify for an exception from the SEC.

Nexo took to Twitter to announce their agreement with the SEC, NASAA, and other regulators:

“We are content with this unified resolution which unequivocally puts an end to all speculations around Nexo’s relations to the United States. We can now focus on what we do best - build seamless financial solutions for our worldwide audience." - Antoni Trenchev, Co-founder of Nexo

I guess this is good news that Nexo quickly settled with the SEC and other regulators, so that they can focus on providing legal business services without the threat of future charges.

I am interested to see if Nexo attempts to provide another Interest-earning service in the future; perhaps one within the bounds of the law.

What is your reaction to this news?

Does this give you peace of mind about Nexo?

Enter my Monthly Giveaway on Publish0x to win yourself some free Crypto!

It takes 5 seconds to enter!

See ya!

:)