On Monday, cryptocurrency lender Nexo announced that it would stop offering products and services in the United States in the coming months. Additionally, the company stated that it would immediately stop access to its Earn Interest Product in eight states and would no longer sign up any new customers from the United States for the Earn product.
Today we are announcing the regrettable but necessary decision that Nexo will be phasing out its products and services in the United States due to a lack of regulatory clarity. 🧵
— Nexo (@Nexo) December 5, 2022
In the blog post, Nexo said that it has been in communication with United States authorities for the last 18 months in an effort to discover how to comply with financial rules that are applicable to the United States. However, the corporation and authorities from the United States have not reached a consensus as a consequence of these discussions.
Our decision comes after more than 18 months of good-faith dialogue with US state and federal regulators which has come to a dead end. It is now unfortunately clear to us that despite rhetoric to the contrary, the US refuses to provide a path forward for enabling blockchain businesses and we cannot give our customers confidence that regulators are focused on their best interests.
Nexo said in a blog post
Nexo has previously off-boarded Earn customers in the states of New York and Vermont at the behest of the authorities in those jurisdictions. It will now stop allowing new users in the states of Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, and Washington to sign up for an account. Residents in these states may continue to use Nexo’s other services without interruption.
Nexo, in contrast to other cryptocurrency lenders such as BlockFi, Voyager, and Celsisus, which have all failed after the failure of the cryptocurrency project Terra and the digital asset exchange FTX, has been able to keep its head above water for the time being. In September, state securities authorities in California and many other states began action against the parent business of Nexo, Nexo Group, alleging that the Earn Interest Product offered by the firm was an unregistered security.
Nexo detailed its complaints with U.S. regulators throughout the blog post, saying that “although regulators initially encouraged our cooperation and a sustainable path forward appeared viable,” recent events have created “an impossible environment” for the company to continue operating in. This may be a reference to the upheaval that was caused by the collapse of FTX.
This was made crystal clear by the Consumer Financial Protection Bureau’s (CFPB) decision this past Thursday insisting it has jurisdiction to investigate our Earn Interest Product, which the SEC and state regulators have simultaneously insisted is a security subject to their jurisdictions.
Nexo said in a blog post
