Crypto lender Nexo fined $45 million

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Cryptocurrency lending firm Nexo has been fined $45 million for violating federal securities law, the Securities and Exchange Commission announced Thursday, the latest in a series of enforcement actions. enforcement that US regulators have taken to crack down on misconduct in the crypto industry.

Starting in 2020, Nexo allowed customers in the United States to put their savings back into cryptocurrency and earn interest on those funds, the SEC said. The agency found that the program of interest was considered a title and that Nexo did not register properly.

Nexo settled the charges without admitting wrongdoing. The company agreed to pay a $22.5 fine to the SEC and another $22.5 million to settle charges from state regulators.

We accused Nexo of failing to register its retail crypto lending product before offering it to the public, circumventing essential disclosure requirements designed to protect investors, SEC Chairman Gary Gensler said in a statement. a statement. Following our proven public policies is not a choice.

A Nexo founder, Antoni Trenchev, said the company was happy with the unified resolution.

We can now focus on what we do best to create seamless financial solutions for our global audience, he added.

Nexo, which was established in the Cayman Islands in 2018, is part of a large group of leading crypto companies that have promised to pique customer interest by investing their crypto savings for them. In March, interest product Nexos had 112,000 US investors, who had invested $2.7 billion in assets, according to court documents. The company promised returns as high as 12%.

The Nexo fine is the latest effort by US regulators to rein in the crypto industry. After Bahamas-based crypto exchange FTX collapsed in November, the SEC, Commodity Futures Trading Commission and Department of Justice filed suit against company founder Sam Bankman-Fried, accusing him of years of fraud. Two other FTX executives, Caroline Ellison and Gary Wang, pleaded guilty to criminal charges.

But federal regulators were scrutinizing crypto lenders long before the FTX crash. Last week, the SEC accused crypto lender Genesis of offering unregistered securities through a product that promised investors high interest on deposits. And last year, the agency announced $100 million in penalties against BlockFi, a crypto lender that also announced big returns for customers.

BlockFi filed for bankruptcy in November largely due to its close ties to FTX. Two other crypto lending companies, Voyager Digital and Celsius Network, also filed for bankruptcy last year.

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