Nexo to terminate yield-bearing product after paying $45 million
Terrill Dicki Feb 14, 2023 09:02
Nexo Capital's cryptocurrency yield-bearing product is being shut down in the US following a multi-million dollar settlement with the SEC and NASAA.
After agreeing to pay $45 million in fines to U.S. regulators, cryptocurrency lending company Nexo Capital has decided to end its yield-bearing Earn Interest product for its customers in the United States. This decision will take place approximately one month after the company reached the settlement.
Nexo made the announcement through a blog post on February 10 and said that all production of the product will cease on April 1. By lending particular cryptocurrencies to Nexo, users were able to participate in the scheme and receive daily compounding returns on those coins.
Nexo said that the settlements that it reached on January 19 with the Securities and Exchange Commission and the North American Securities Administrators Association were the reason why it had to discontinue the offering of Earn.
Due to Nexo's failure to register the offer and sale of its Earn product, the SEC, NASAA, and at least 17 state securities authorities conducted an investigation against the company.
In addition to paying a penalty of $22.5 million and reaching an agreement with the SEC to stop marketing its Earn product to investors in the United States, Nexo also agreed to pay an additional $22.5 million in penalties to address accusations brought by state authorities.
Nexo did not confirm or refute the conclusions of the SEC, but the company did consent to a cease-and-desist order that prevents it from breaching any aspects of securities law.
In accordance with the statement made by Nexo, Earn users will continue to be compensated with interest until April 1st. Nexo encourages consumers to "begin preparing the withdrawal of your monies" before the fixed-term product's termination date so that they may access the product once it has been unlocked.
According to the company, other Nexo services and products would not be adversely impacted in any way.
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