On the 5th of December, Nexo, a crypto lender, announced that it would gradually end its US products and services over the coming months. The reason which led the crypto lender to make this decision is hitting a dead end with regulators. In a blog post, Nexo, a UK-based company, shared this announcement that it had been talking with regulators for 18 months, but the US rejected providing a path for promoting blockchain businesses.
Nexo, a digital asset platform, loans out customers’ funds and uses the proceeds to pay interest. In the blog post, the crypto lender said that Our decision comes after more than 18 months of good-faith dialogue with the US state and federal regulators, which has come to a dead end. The state and federal regulators had inconsistent and changing positions, the company added. The crypto lender said that it now cannot provide our customers confidence that regulators are focused on their best interests.
According to the announcement, the crypto lender, from the 6th of December, will discontinue its Earn Interest Product in eight states, including Maryland, Oklahoma, South Carolina, Wisconsin, California, Indiana, Kentucky, and Washington. After this, the users of the US will no longer be able to sign up for the Earn product. However, the company assured that access to accounts and withdrawals would not be affected.
At the end of September, state securities regulators in California and several other states took action against Nexo’s parent company Nexo Group, asserting the crypto lender’s Earn Interest Product was an unregistered security. However, Nexo has well managed this situation, unlike other crypto lenders such as Voyager, BlockFi, and Celsius, which have all collapsed after the fall of crypto project Terra and cryptocurrency exchange FTX.
