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Crypto Lender Nexo Accused of Illicit Activity – CryptoActu

Interest-bearing crypto accounts have never been the fragrance of holiness in many US states. The latest platform to pay the price is Nexo, which was nevertheless warned but apparently continued to violate the securities rules.

Lender Nexo has been criticized by regulators in several US states

Regulators in California, Washington, Vermont, Kentucky, Oklahoma, South Carolina and Maryland are seeing a red light. The reason for their dissatisfaction: the fact that the Nexo lender continues to offer high-yielding crypto savings products to US residents. Products that in the eyes of regulators are unregistered financial securities.

The most furious, as is often the case, is the formidable New York State Attorney Letitia James, who already vented her anger in February 2022 by imposing a cease and desist order on the Swiss company, and who announced, in a separate lawsuit, to take legal action against him for “illegal activities and defrauding investors.” An expected procedure, the prosecutor believes from the outset that crypto platforms are “no exception” and should be registered like other investment media.

Despite warnings from the Attorney General’s Office, Nexo did not register as a stockbroker and falsely told investors that it was a licensed and registered platform.

New York State Attorney General’s Statement

Therefore, he calls for “damages to thousands of defrauded investors and the recovery of proceeds generated from Nexo’s illegal actions.”

From other securities regulators, the story is less ominous, but nonetheless aimed at Nexo’s default on its “Make Money Interest Product” offer.

These crypto-interest accounts are securities and are subject to investor protection under the law, including proper disclosure of the associated risk.

Clotilde Hewlett, Commissioner of the California Department of Financial Protection and Innovation, in a communiqué

Nexo, not very responsive to the taste of the authorities

Thus, the crypto loan and savings platform would not have done its homework since the first warning against it. At the time, she said the offer would not be available to new US customers until the situation was resolved, but she didn’t put it on hold for old ones.

Following the US Securities and Exchange Commission’s February 2022 release of the Interest Earning Product Guide, dubbed the “BlockFi Order”, Nexo voluntarily stopped registering new US customers to use our interest earning product and discontinued the product for new balances of existing customers. (…) Nexo aims to find a clear path for regulated supply of products and services in the United States, ideally at the federal level.

Antoni Trenchev, CEO of Nexo, in a press release

Will she be able to avoid fines against BlockFi, which was forced to pay a hefty $100 million fine for the same reason? Have. But what is certain is that crypto lending and borrowing platforms are more than ever under the radar of regulators. Voyager Digital and Celsius went bankrupt for good reason, having discovered more than questionable practices with their clients’ assets. The BlockFi episode was also a little hot, although a priori he managed to recover thanks to the help of FTX.

In fact, in this ambient slump, Nexo came out of it more like breaking down, currently not finding a single corpse in his closet and even showing a brazen look, to the point of wanting to redeem some of his bad-form rivals. . . . However, the difficult period is far from over, and caution remains the watchword.

The main thing when you want to invest in cryptocurrencies is to carefully choose your assets, as well as a reliable and secure exchange platform on which you will work. Don’t wait any longer and register on the FTX exchange. A small bonus: you will receive a lifetime discount on trading fees (commercial link).

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