Cryptocurrency lender Nexo has agreed to pay $45 million to settle lawsuits from the US SEC and other US regulators accusing the company of promoting unregistered interest-bearing products.
In September, regulators in eight U.S. states sued Nexo, accusing the platform of failing to register crypto-currency interest-bearing (EIP) products. The US Securities and Exchange Commission (SEC) claims that EIPs launched by Nexo in June 2020 are subject to securities laws and therefore are not exempt from registration.
Nexo management did not acknowledge or deny the accusations of the regulators. On Thursday, January 19, the platform agreed to settle the matter with the SEC, the North American Securities Administrators Association (NASAA), the New York Attorney General’s Office, and other agencies. Nexo will pay $22.5 million to the SEC, with the remaining $22.5 million going to other regulators.
Nexo co-founder Antoni Trenchev thanked law firm Schulte Roth and Zabel LLP for achieving a “most favorable” outcome. Trenchev added that this would settle years of regulatory investigations into Nexo so the company can focus on building and improving its products.
Another Nexo co-founder, Kosta Kantchev, said he hopes there will be a clearer legal framework in the United States soon so that companies like Nexo can offer their products and services in a compliant manner. This will allow the US to strengthen its position as a world leader in innovation, Kantchev added.
Nexo recently filed a lawsuit against the Cayman Islands Monetary Authority (CIMA), which refused to register the platform as a Virtual Asset Service Provider (VASP). Nexo management believes that there were no compelling reasons for the refusal.
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.