Nexo agrees to pay $45 million in fines to US authorities

Nexo agrees to pay $45 million in fines to US authorities

Back in September, the California DFPI and other US regulators had ordered Nexo to stop offering Earn Interest Products (EIP), which in the company's case took the form of crypto asset lending accounts.

At the time of the indictment, Nexo had already stopped offering the accounts to US investors.

However, US investors could still use the feature by opting for automatic renewal of existing accounts.

Cooperation with authorities

Four months later, both the SEC and the North American Securities Administrators Association (NASAA) announced that their lawsuits against the lender had concluded. As a result of the investigation, Nexo voluntarily agreed to pay $45 million in fines.

The crypto platform refused to confirm or deny the regulators' findings - however, an SEC spokesperson explained that the penalties imposed on the firm took into account Nexo's cooperation and willingness to fully cooperate with regulators.

Additionally, SEC Chairman Gary Gensler stated that Nexo was not charged for operating an EIP, but rather for failing to properly register it.

"We have accused Nexo of failing to register its retail crypto lending product before offering it to the public, thereby circumventing essential disclosure requirements to protect investors. Compliance with our established public policies is not a choice. Where crypto companies fail to comply, we will continue to follow the facts and the law to hold them accountable. In this case, Nexo is, among other things, discontinuing its unregistered lending product to all U.S. investors."

Several fines are split between regulators

The $45 million in penalties will be paid out to multiple companies in at least 18 separate fines. The largest represents half of the total and is paid directly to the SEC.

The remaining $22.5 million will be paid out to at least 17 separate state securities regulators coordinated by NASAA. The exact states are unnamed; However, we can guess that California is one of them based on their early involvement in the case.

The agreement was also confirmed by Nexo in a 9-part thread on Twitter.

Nexo has reached a final landmark resolution with the US Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), consisting of all 50 US states and 3 territories, and the New York Attorney General.🧵https://t.co/modjbPsOdV

— Nexo (@Nexo) January 19, 2023

In the thread, the spokesperson for Nexo once again stated that there were no allegations of fraud or anything other than an unregistered securities offering. The spokesperson also reiterated that the company is pleased with the constructive dialogue with the authorities and that they will continue to grow and improve based on the feedback received.

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