Faced with a phalanx of authorities, crypto lending company Nexo has announced that it would phase down its business in the United States.
The company specifically mentioned a recent rush by state authorities and the federal Consumer Financial Protection Bureau (CFPB) to probe Nexo’s “Earn” proposition.
On Thursday, the CFPB denied the Nexo’s request to halt an inquiry into the product, arguing that only securities authorities had authority over it. In response, the company said:
“This was made crystal clear by the Consumer Financial Protection Bureau’s decision this past Thursday insisting it has jurisdiction to investigate our Earn Interest Product, which the SEC and state regulators have simultaneously insisted is a security subject to their jurisdictions.
In addition, a number of the very state securities regulators we had been cooperating with for several months blindsided us by filing actions against us without advance notice.”
The company announced earlier this year that it would no longer pay interest on new Earn deposits from the United States.
Nexo is the last major crypto lending platform still in operation, as competitors such as BlockFi, Celsius, and Voyager have declared bankruptcy.
The SEC, on the other hand, has raised concerns about similar products, including a $100 million fine against BlockFi, which Nexo cited in its petition to the CFPB to drop an investigation. State regulators, who sometimes collaborate with federal authorities, also issued cease and desist letters to the company in September.
Nexo is the world’s most advanced, regulated digital assets institution offering quick fiat on-ramps for 40+ cryptocurrencies, industry-leading earn rates on assets, intuitive crypto exchange, instant crypto credit lines, and the world’s first crypto-backed credit card.
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