Nexo shutters US Earn product a month after settling with regulators
The shutdown of Nexo’s earn product follows from a multi-million dollar settlement the firm paid last month with U.S. regulators.
Cryptocurrency lending firm Nexo Capital is set to terminate its yield-bearing Earn Interest Product for its customers in the United States roughly a month after it agreed to pay $45 million in penalties to U.S. regulators.
Nexo announced the termination in a Feb. 10 blog post saying the product would be stopped on Apr. 1. The program allowed users to earn daily compounding yields on certain cryptocurrencies by loaning them to Nexo.
An update for our U.S. clients.https://t.co/wRiDOPKEqg
— Nexo (@Nexo) February 11, 2023
Nexo pointed to its Jan. 19 settlements with the Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) as the reason for the halt on offering Earn.
The SEC, NASAA and at least 17 state securities regulators investigated Nexo for failing to register the offer and sale of its Earn product.
Nexo paid a $22.5 million penalty and agreed with the SEC to cease offers of its Earn product to U.S. investors, an additional $22.5 million in fines were paid to settle charges by state regulators.
Nexo did not admit or deny the findings by the SEC but agreed to a cease-and-desist order prohibiting it from violating securities law provisions.
Related: US financial regulators warn against crypto exposure in retirement accounts
According to Nexo’s announcement, Earn users will continue to receive interest payments until Apr. 1. Those subscribed to a fixed-term product will have it unlocked on the termination date with Nexo urging users to “begin planning the withdrawal of your funds.”
Other Nexo services and products will not be affected according to the firm.