Crypto Lender Nexo Agrees to Pay $45 Million in Fine to SEC

One week after the Nexo office in Bulgaria, the crypto lender entered into a settlement with the US Securities and Exchange Commission (sec) by paying a total of $45 million in fines. The SEC invoiced Nexo for its non-registered crypto loan product, Earn Interest Product (EIP), to U.S. investors.

Nexo agreed to pay a penalty of $22.5 million and discontinue its unregistered offer. In addition, the crypto lender agreed to pay an additional $22.5 million to pay similar fees through government regulators.

In accordance with sec, the crypto lender began offering their EIP product around June 2020. This EIP product has enabled crypto-investors based in Europe to offer their digital assets to nexo in return for a promise to pay interest.

The ordinance also notes that nexo has commercialized this EIP as an attractive product on crypto repositories. Later, the crypto lender exercised their discretion using the crypto assets of investors in a variety of ways. In doing so, nexo generated revenue for its own company while financing interest payments to EIP investors.

Nexo's PII is a safety feature.

In its submission, the SEC noted that the crypto lender's use of the POI product is collateral. The securities regulatory authority added that nexo had not registered its offer and sale of the IAP. The SEC's chairman, Gary Gensler, talks about development.

"We have accused Nexo of failing to register its retail crypto loan product before making it available to the public, by circumventing critical disclosure requirements designed to protect investors. Respect our tried and true public policies is not an option. When crypto companies fail to comply, we will continue to monitor the facts and the law to hold them to account. In this case, among other measures, Nexo terminates its non-registered loan proceeds as it does for all American investors."

Nexo committed to pay the fine without contesting the decision of the SEC. Last month, the crypto lender announced its exit from the US market while deciding to cut off its EIP product immediately.