Crypto-lender Nexo faces charges from eight U.S states
ambcrypto.comSwitzerland-based crypto-lender Nexo is facing simultaneous enforcement action from eight different U.S states over varying allegations. Actions include cease and desist orders, administrative measures etc.
State regulators from California, Kentucky, New York, Maryland, Oklahoma, South Carolina, Washington and Vermont have claimed that Nexo allegedly failed to register its “Earn Interest Product” as a security and offered it to clients in the form of an interest yielding account.
California’s Department of Financial Protection and Innovation (DFPI) issued a cease and desist order and released a statement regarding the same. “These crypto interest accounts are securities and are subject to investor protections under the law, including adequate disclosure of the risk involved,” said DFPI Commissioner Clothilde Hewlett.
The release also noted that Nexo offered significantly high interest rates to investors with the concerned product, sometimes upto 36%.
The state of Virginia issued an ex parte cease and desist order citing lack of protection by Securities Investor Protection Corporation (SIPC). The order also noted that the concerned product was not insured by the Federal Deposit Insurance Corporation (FDIC).
Oklahoma and Kentucky joined California and Virginia in issuing cease and desist orders. The state of Washington has not yet issued a cease and desist order, but it did publish a statement of charges which detailed all alleged misdeeds.
New York, Maryland and South Carolina have not issued cease and desist orders yet, however, they did issue notices levelling similar accusations. New York has initiated action that specifically accuses Nexo of misrepresentation regarding its registration status.
The complaint filed by New
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