Nexo Capital, a cryptocurrency lender, has agreed to pay a $45 million fine in a settlement with the U.S. Securities and Exchange Commission (SEC) and state regulators over its failure to register its crypto asset lending product. The SEC announced that Nexo was charged with failing to register its retail crypto asset lending product called Earn Interest Product (EIP).
To settle the charges brought against it, Nexo agreed to pay a penalty of $45 million, with $22.5 million going to the SEC and $22.5 million in fines to state regulators. In September 2022, Nexo came under regulatory fire for its EIP by eight states in the U.S. The SEC alleges that Nexo began offering its EIP in June 2020, which allowed U.S. investors to hand over their crypto assets to the company in exchange for a promise of interest.
According to the SEC’s order, around June 2020, Nexo began offering and selling the EIP in the United States. The EIP allowed U.S investors to tender their crypto assets to Nexo in exchange for the company’s promise to pay interest. The order states that Nexo marketed the EIP as a means for investors to earn interest on their crypto assets, and Nexo exercised its discretion to use investors’ crypto assets in various ways to generate income for its own business and to fund interest payments to EIP investors. The order finds that the EIP is a security and that the offer and sale of the EIP did not qualify for an exemption from SEC registration.
In conclusion, regulatory compliance is crucial for any crypto lending platform, and the finance charges faced by Nexo serve as a reminder to all companies operating in this space that they must comply with the laws and regulations that govern the industry.
Want to know more about the recent fine that crypto lender Nexo has agreed to pay to the SEC and state regulators over its failure to register its crypto lending product? Check out our full video #Nexo #SEC #crypto #cryptonews
Sources:
cryptodaily.co.uk/2023/01/nexo-pays-a-fine-in-a-settlement-with-sec
File : Nexo Finance.png by Nedy123, CC BY-SA 4.0 creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons
Disclaimer: The opinion expressed here is not investment or LEGAL advice – it is provided for informational purposes only.
