The Securities and Exchange Commission (SEC) is taking action against crypto trading platform, Nexo. The agency has charged the company with failing to register its crypto lending product, which was an interest-bearing consumer product that allowed people to lend their crypto in return for yield.
Nexo has agreed to pay 45 million dollars in penalties to both the SEC and state regulators, without admitting or denying the SEC’s allegations. It has also agreed to a cease and desist order.
SCC Chairman Gary Gensler stated that compliance with public policies is not a choice, and that the agency will continue to hold companies accountable if they do not comply with the law.
Last week, the SEC charged two other crypto companies, Genesis and Gemini, with violating securities laws for a similar interest-bearing product. The enforcement action comes amid pressure for the SEC to impose safeguards after the FTX collapse.
Despite the enforcement actions, the SEC has faced criticism for not imposing these safeguards earlier. Nevertheless, the recent crackdown highlights the agency’s commitment to ensuring compliance with securities laws in the crypto industry.
The FTX collapse and the ramping up of enforcement actions have also sparked a debate on the definition of securities and where traditional regulatory frameworks should be involved in the crypto space. However, the crackdown on Nexo and other companies is not an indictment of Bitcoin, which has continued to trade strongly despite the recent events.
CNBC’s Kate Rooney reports on a new SEC action. With CNBC’s Melissa Lee and the Fast Money traders, Tim Seymour, Bonawyn Eison, Steve Grasso and Guy Adami.
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