Nexo Stopped Offering Lending Products In The US In April After Paying A Fine Of $45M

Key Points:

• Nexo announced that it would also offer its “Earn Interest Product (EIP)” lending product to all US customers on April 1.
• Previously, this product of the cryptocurrency company was fined $45 million by the SEC for not having registered for an EIP.
• Non-US customers who believe their account has been falsely flagged must update their verification details.

Cryptocurrency lending platform Nexo will stop offering its “Earn Interest Product (EIP)” lending product to all US customers (including citizens and residents) on April 1.

“We ask that you begin planning the withdrawal of your funds at a convenient time by this date,” the company said in a blog post, adding that no other Nexo services will be affected. Clients with outstanding credit will be given “ample time and notice” to repay loans and withdraw collateralized assets.

This action comes after Nexo was accused by the SEC of failing to register its EIP offering and sale. Following a settlement with the US Securities and Exchange Commission announced last month, the crypto company has agreed to pay a $45 million fine and stop offering EIPs.

The course of action “reflects our belief that the development of clear regulatory frameworks is the best way to protect the crypto industry and usher it into the mainstream safely and compliantly,” the company said.

Nexo began offering EIPs to US customers in June 2020. The SEC previously accused Nexo of issuing and selling EIPs without registration. Nexo agreed to pay a $22.5 million fine to the SEC and an additional $22.5 million to settle similar fees brought by state regulators.

In addition, non-US customers who believe their account has been falsely flagged must update their verification details by providing documents such as a bank statement or utility bill.

In recent times, cryptocurrency companies have been constantly receiving scrutiny from legal authorities. Recently, Kraken was also touched by the SEC when it found that the company providing securities was not registered and was subject to a fine of up to $30 million.

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