In the words of SEC Chair Gary Gensler, “We charged Nexo with failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors.”
Crypto lender Nexo has agreed to pay $45M to the SEC and state regulators for failing to register its Earn Interest Product (EIP).
Nexo has reached a final landmark resolution with the U.S. Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), consisting of all 50 U.S. States & 3 territories and the Attorney General of New York.🧵https://t.co/modjbPsOdV
— Nexo (@Nexo) January 19, 2023
In 2022, state regulators filed a lawsuit against Nexo for violating state laws by offering unregistered securities. In its statement, the North American Securities Administrators Association (NASAA) claimed that Nexo also failed to provide disclosures of the risk associated with investing in the EIP. Andrew Hartnett, the President of NASAA, said,
“Our securities laws are designed to protect investors through full and fair disclosure.”
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According to the SEC’s press release, Nexo will pay $22.5M as the penalty for the unregistered offer and sale of the EIP to US clients. The crypto lender will also pay $22.5M as a settlement to state regulators for similar charges.
However, Nexo has neither admitted nor denied the findings of the regulators’ investigation. In a recent blog post, Nexo noted that the $45M settlement will close the multi-year-long inquiries into the firm’s various aspects.
