Nexo Acquired A Stake In Summit National Bank

Nexo, a cryptocurrency lender, has acquired a stake in Summit National Bank, a federal bank in the United States overseen by the Office of the Comptroller of the Currency (OCC).

The deal has been reviewed by the OCC as part of the bank’s general overhaul plan, per the statement.

Nexo stated that the transaction will allow the company to offer bank accounts, lending, and card services to both retail and institutional clients in the United States. Clients of the bank will be able to use Nexo’s cryptocurrency services, according to the company.

The announcement comes a day after eight states – California, Kentucky, New York, Maryland, Oklahoma, South Carolina, Washington, and Vermont – filed lawsuits against Nexo, saying that the company provided consumers unregistered, interest-bearing crypto accounts.

Antoni Trenchev, the Nexo co-founder, commented on the moves, saying Nexo voluntarily discontinued onboarding new U.S. clients for its yield product and stopped offering new balances for current clients when the Securities and Exchange Commission (SEC) filed an order against rival BlockFi in February 2022. BlockFi paid a $100 million penalty to settle state and federal lawsuits at the time.

“Nexo is committed to finding a clear path forward for the regulated provision of products and services in the U.S., ideally on a federal level,” said Trenchev.

Summit National Bank, originally known as Hulett National Bank, was established in 1984. Its founders are unknown, however, Forrest Gilman is the current majority shareholder and chairman of the board.

According to Trenchev, the agreement has been in the works for more than two years. When asked if regulatory permits had been obtained, he stated, “whatever approvals were needed have been secured.”

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