Nexo’s earn product has been shut down due to a multi-million-dollar settlement the company reached with US regulators last month.
Nexo announced the termination in a blog post on February 10, stating that the product would be discontinued on April 1. Users could earn daily compounding yields on certain cryptocurrencies by lending them to Nexo.
Nexo cited 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 in offering Earn.
Nexo was investigated by the SEC, NASAA, and at least 17 state securities regulators for failing to register the offer and sale of its Earn product.
A $22.5 million penalty has been paid by Nexo and agreed with the SEC to stop offering its Earn product to U.S. investors; an additional $22.5 million in fines was paid to settle state regulator charges.
Nexo did not admit or deny the SEC’s findings but agreed to a cease-and-desist order barring it from violating securities laws.
Earn users will continue to receive interest payments until April 1, according to Nexo’s announcement. Those who have signed up for a fixed-term product will have it unlocked on the termination date, with Nexo advising users to “start planning the withdrawal of your funds.”
According to the company, other Nexo services and products will be unaffected.
Nexo is a globalized institution for digital assets. The mission of the company is to maximize the value and utility of digital assets by providing a comprehensive suite of products such as advanced trading solutions for retail and institutional clients, liquidity aggregation from leading venues, and tax-efficient asset-backed credit lines. Nexo Ventures, the company’s investment arm, was founded in early 2022 and now has over 60 portfolio companies. Nexo has processed over $130 billion for over 5,000,000 satisfied users in over 200 jurisdictions.
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