Claim BonusCrypto Lender Nexo Agrees to Pay $45 Million in Fine to SEC
A week after Nexo’s office in Bulgaria was raided, the crypto lender reached a settlement with the U.S. Securities and Exchange Commission (SEC) paying a total of $45 million in fines. The SEC has charged Nexo for the unregistered offering of its crypto lending product, the Earn Interest Product (EIP), to the U.S. investors.
For this, Nexo has agreed to pay a $22.5 million penalty and cease its unregistered offer. Besides, the crypto lender has agreed to pay an additional $22.5 million in order to settle similar charges by the state regulatory authorities.
As per the SEC, the crypto lender started offering its EIP product around June 2020. This EIP product allowed US-based crypto investors to tender their digital assets to Nexo in exchange for the promise to pay interest.
The order also notes that Nexo marketed this EIP as an interest-earning product on crypto deposits. Later, the crypto lender exercised its discretion by using investors’ crypto assets in different ways. This way, Nexo generated income for its own business along with funding the interest payments to EIP investors.
Nexo’s EIP Is A Security
In its filing, the SEC noted that such a use of the EIP product by the crypto lender constitutes a security. The securities regulator added that Nexo failed to register its offer and sale of the EIP. Speaking on the development, SEC Chair Gary Gensler said:
“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. Compliance with our time-tested public policies isn’t a choice. Where crypto companies do not comply, we will continue to follow the facts and the law to hold them accountable. In this case, among other actions, Nexo is ceasing its unregistered lending product as to all U.S. investors.”
Nexo has agreed to pay the fine without challenging the SEC’s decision. Last month, the crypto lender announced its exit from the US market while deciding to cut off its EIP product immediately.
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more… to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Delivered every day.
- Insights that move markets
- 100,000 active subscribers
Related Articles
- Will Bitcoin Crash Again as ‘Trump Insider’ Whale Dumps 6,599 BTC
- XRP News: Ripple’s RLUSD Gets Boost as CFTC Expands Approved Tokenized Collateral
- Crypto Markets Brace as Another Partial U.S. Government Shutdown Looms Next Week
- $40B Bitcoin Airdrop Error: Bithumb to Reimburse Customer Losses After BTC Crash To $55k
- ETH Price Fears Major Crash As Trend Research Deposits $1.8B Ethereum to Binance
- Cardano Price Prediction as Midnight Token Soars 15%
- Bitcoin and XRP Price Outlook Ahead of Crypto Market Bill Nearing Key Phase on Feb 10th
- Bitcoin Price Prediction as Funding Rate Tumbles Ahead of $2.1B Options Expiry
- Ethereum Price Outlook as Vitalik Buterin Sells $14 Million Worth of ETH: What’s Next for Ether?
- Solana Price at Risk of Crashing Below $50 as Crypto Fear and Greed Index Plunges to 5
- Pi Network Price Prediction Ahead of PI KYC Validator Reward System Launch
