Crypto lender Nexo fined $45 million for unauthorized security sales

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Cryptocurrency lending firm Nexo has been sanctioned by the U.S. Securities Exchange Commission (SEC) for offering and selling unregistered securities, part of regulators’ latest push to crack down on the cryptocurrency industry. cryptography. Announced via an SEC press release on January 19, Nexo was fined $45 million for failing to register the offering and sale of a cryptocurrency lending product, Earn Interest. Product (EIP), which promised returns on deposited crypto.

According to the SEC order, Nexo began offering EIP around June 2020 and marketed the product as a way for investors to earn interest on their crypto assets. The agency alleges that Nexo used its investors’ crypto assets in a variety of ways, including to fund interest payments to EIP investors and to generate revenue for its own business. The order classifies the EIP as a security and found that Nexo had not registered the product as such with the SEC.

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. Following our proven public policies is not a choice. When crypto companies fail to comply, we will continue to follow the facts and the law to hold them accountable.

Although Nexo has not admitted wrongdoing or denied the SEC’s findings, the company has agreed to pay a $22.5 million fine to the SEC and will no longer offer EIP to US investors, while phasing out all products and services it offers in the United States. States. Nexo will also pay an additional $22.5 million in fines to settle similar charges by state regulators.

BlockFi was fined $100 million last year for similar charges related to its interest program

We are content with this unified resolution which puts an unequivocal end to all speculation surrounding Nexos’ relationship with the United States, Antoni Trenchev, co-founder of Nexo said in a statement. We can now focus on what we do best to create seamless financial solutions for our global audience.

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