Nexo confirms to pay a total of $45M in settlement to U.S. regulators
On 19th Jan, the security regulators of the U.S. North American Securities Administrators Association and Securities and Exchange Commission (SEC), announced that Nexo capital had to pay almost $45 million in penalties. The regulators claim that Nexo has failed to register its EIP. As a result, Nexo confirmed to pay a penalty of $22.5 M and discontinued its unrecorded sale and offer to the investors of the U.S. As per the report, he also admitted to paying another $22.5 M as a fine to settle identical state regulatory charges.
As per the statement of SEC, Nexo started offering and selling the EIP around June 2020, which permits U.S. investors to offer their crypto money to the company. In doing so, Nexo promised interest as a reward in exchange for the investors.
NASAA stated that while investigating, it was revealed that the EIP investors could receive interest on digital assets by lending them to Nexo. They charged Nexo for surpassing the necessary disclosure, which is meant to protect investors. Nexo agreed to settle the charges for skipping its crypto lending product registration before making it public.
However, Nexo, without admitting or denying the SEC’s findings, agreed to pay the fine for settlement. As per the statement given by Nexo, the settlement aims to close all long inquiries going on for a year or more, and the company wants to look forward to the various aspects of its business.
Nexo voluntarily took the decision to exit from the U.S. market and permanently ceased offering its EIP to new investors. It also ceased rewarding interest on new capital that has been added to current EIP accounts of the U.S. investors withdrawing all its services and products in the U.S.
However, as per the opinion of the SEC, compliance with the rules and regulations is one of the most important things. According to them, if the SEC offers any products that constitute securities under well-established laws, then the company needs to comply with the same. Compliance is not optional but a necessity.
