The Securities and Exchange Commission (SEC), a government agency in the United States, fined Nexo $45 million for selling a crypto lending product without permission.
The SEC says that Nexo sold unregistered Earn Interest Products (EIPs) to US investors in June 2020. This cost US investors $22.5 million in fines and regulators another $22.5 million in fines. Due to the charges, Nexo has stopped offering the EIP and will also stop providing services in the US.
SEC Chair Gary Gensler stated:
“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 US investors.”
Gurbir S. Grewal, Director of the SEC’s enforcement division, added:
“We are not concerned with the labels put on offerings but on their economic realities. And part of that reality is that crypto assets are not exempt from federal securities laws. If you are offering or selling products that constitute securities under well-established laws and legal precedent, then no matter what you call those products, you are subject to those laws, and we expect compliance.”
Nexo has permission to do business in almost 50 countries, and they just got approval to offer more products and services in Italy.
