Nexo Capital Inc., a company that deals in digital assets, will pay up to $45 million in fines to federal and state regulators in the United States following accusations that it violated securities laws by providing a crypto financing product.
The Earn Interest Product from Nexo was a security that needed to be registered with the Securities and Exchange Commission, according to a statement released on Thursday by the commission.
“Their economic realities are our main concern; we don’t care what labels are attached to the goods. Gurbir Grewal, the SEC’s enforcement director, said in a statement that one aspect of this reality is the fact that crypto assets are not exempt from federal securities laws.
According to the SEC, Nexo will pay $22.5 million to resolve complaints from state regulators and $22.5 million to the SEC. In the settlement, Nexo didn’t confirm or refute the agency’s conclusions. Nexo was accused of marketing interest-earning accounts without registering the investment products as securities by regulators from eight U.S. states in September: California, Kentucky, Maryland, New York, Oklahoma, South Carolina, Vermont, and Washington.
After receiving cease-and-desist orders from numerous states about its interest-earning products, Nexo announced in December that it was gradually discontinuing its products and services in the American market.
Nexo referred to the agreement with the SEC, the North American Securities Administrators Association, and numerous other state regulators as a “final landmark resolution” in a statement.
In a statement, Nexo co-founder Antoni Trenchev said, they are satisfied with this unified resolution which unequivocally puts an end to any doubts regarding Nexo’s links to the United States.
Nexo announced that it would suspend taking on new U.S. customers for its lending products and halt interest payments on new deposits from U.S. customers after BlockFi Inc. consented in February of last year to settle comparable claims with the SEC and states for a combined $100 million.
