US authorities fined Nexo $45 million

Crypto lending platform Nexo has reached an agreement with US regulators over allegations of an unregistered sale of securities. The company will pay $45 million in fines as part of the claims settlement.

The U.S. Securities and Exchange Commission (SEC), as well as the regulatory agencies of several states, have considered the Earn Interest Product (EIP) crypto-currency interest product as securities.

According to the SEC, the company failed to register the offering under applicable law and circumvented disclosure requirements.

“We are not interested in the labels attached to the proposals, but in their economic realities. And part of that reality is that crypto assets are not exempt from federal securities laws,” said Gurbir Grewal, director of SEC enforcement.

Under the agreements reached with regulators, Nexo will pay a fine of $22.5 million to the Commission, a similar amount in favor of state regulators. Cryptocurrency company will stop offering EIP to US investors.

The SEC noted that the settlement of claims against Nexo took into account the cooperation of the company and its preemptive decision to leave the US market.

“We are confident that a clearer regulatory framework will soon emerge and companies like Nexo will be able to offer value-creating products in the United States as required, and the US will further strengthen its position as an innovation engine in the world,” said Nexo co-founder Costa Kanchev.

In February 2022, the company’s rival platform BlockFi settled similar charges from the SEC and regional agencies, agreeing to pay $100 million in fines.

Nexo’s Bulgarian offices were raided in January as part of an investigation into potential violations of anti-money laundering regulations. The company faced a significant outflow of funds.

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