The legal "storm" that has already hit lending platforms cryptocurrency over the past two months finally found the ultimate representative in the field, Nexo.
State securities regulators in California and several other states have taken action against Nexo Group, the lending platform's parent company. cryptocurrency Nexo with accusations of targeting the product that earns interest (Earn Interest) developed by the project and provided to users is unregistered securities.
Accordingly, the California Department of Financial Protection and Innovation (DFPI) said in a press release that:
“Nexo's up to 36% interest product is significantly higher than interest rates on short-term securities, investment classes, fixed-income securities or bank savings accounts. As such, they are considered securities and are subject to investor protections under the law.”
The California Securities Regulatory Authority has joined industry bodies in Vermont, Oklahoma, South Carolina, Kentucky and Maryland in filing cease-and-desist orders against Nexo. At the time of writing, Nexo claims the company is legally registered in California, Oklahoma, South Carolina and Maryland.
In the event in Washington state, the government here also released a statement alleging an "attack" on Nexo with a similar purpose. Finally on the afternoon of August 26, New York State Attorney General Letitia James announced that the state was suing Nexo, among other charges, alleging Nexo's failure to comply with applicable regulations and licensing requirements.
Faced with this situation, Nexo CEO Antoni Trenchev said the company is now working with federal and state securities regulators to help make its Earn Interest product compliant.
In addition, he explained more since the instructions of SEC Regarding Earn Interest, also known as the “BlockFi order” in February 2022, Nexo voluntarily stopped referring new US customers to these products as well as stopped the process of providing services to get the balance. new for existing customers.
In fact, Nexo has been eager to demonstrate its financial prowess recently to bolster confidence among authorities and investors following a series of crypto-lending collapses in June 2022.
For example, the act of seeking advice from banking giant Citigroup on the best way to buy companies. crypto are having difficulty, for example Celsius and Vauld, or continue to spend another $50 million on the project's token buyback program. However, it seems that these efforts are not enough for Nexo to escape the "sight" of the US government right now.