Crypto Lender Nexo Pays $22.5M to SEC for Unregistered EIP Offering

• The cryptocurrency lender Nexo has agreed to pay a whopping $45 million to U.S regulators Securities and Exchange Commission (SEC).
• The SEC states in its filing that Nexo’s offering and sale of the Earn Interest product did not qualify for an exemption from SEC registration.

Nexo, a cryptocurrency lending and exchange platform, has agreed to pay $45 million to settle charges from the Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), the Office of the New York Attorney General, and other state regulators over failing to register its Earn Interest product (EIP) as a security.

The SEC alleged that Nexo’s EIP is a security because it is an investment contract that gives investors the expectation of profits based on the efforts of Nexo. Nexo did not register the EIP with the SEC as required by law, and it made false and misleading statements about the EIP to investors.

As part of the settlement, Nexo has agreed to stop selling the EIP in the United States, pay a $22.5 million fine to the SEC, and pay an additional $22.5 million to settle with state authorities. Nexo has also agreed to be censured by the SEC and to cease and desist from violating the securities laws.

In a statement, Nexo co-founder Kosta Kantchev said that the company is “pleased to have reached a settlement with the SEC and other regulators.” He added that Nexo is “committed to complying with all applicable laws and regulations.”

The settlement with Nexo is the latest in a series of enforcement actions by the SEC against cryptocurrency companies. In recent years, the SEC has brought charges against a number of cryptocurrency companies for failing to register their securities offerings. The SEC has also brought charges against cryptocurrency companies for making false and misleading statements to investors.

The settlement with Nexo is a sign that the SEC is taking a tougher stance on cryptocurrency companies. It is likely that we will see more enforcement actions by the SEC against cryptocurrency companies in the future.