Nexo to Exit U.S. Market after Regulator Talks Failure

Nexo Announces Gradual Departure from the United States after Regulator Talks Hit Dead End

Dec 07, 2022
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The company was in talks with regulators for 18 months to comply with U.S. financial laws.

U.K. crypto lender Nexo will be phasing out its products and services in the United States in a gradual and orderly fashion over the coming months after talks with regulators to comply with U.S. financial laws comes to an end, the company announced on its website.

According to the statement, the “regrettable but necessary decision” comes after more than 18 months of good-faith dialogue with US state and federal regulators which has come to a dead end.

Despite inconsistent and changing positions among state and federal regulators, Nexo has engaged in significant ongoing efforts to provide requested information and to proactively modify its business in response to their concerns. 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,” the company writes.

In September, regulators in eight states – including New York, California, Kentucky, Maryland, Oklahoma, South Carolina, Washington and Vermont – announced individual cease-and-desist orders against Nexo, claiming that the crypto-lending platform offered investors interest-earning accounts without first registering them as securities.

The company precises that these changes only affect the usability of the Earn Interest Product for citizens and residents in eight US states (Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, California, and Washington). Clients will continue to access all other Nexo products available in these jurisdictions and uninterrupted access to their assets.

Since its inception in 2018, Nexo has expended significant costs and efforts to do things the right way,” the firm added. “Although regulators initially encouraged our cooperation and a sustainable path forward appeared viable, the events of recent weeks and months and the subsequent change in regulators’ behavior point to the opposite. We have reached a point where regulators are unwilling to coordinate with one another, and are insistent on taking positions that are inconsistent with one another, creating an impossible environment to operate efficiently and to create the expected value for our clients.”

We firmly believe that the blockchain is a transformative technology and recognizing its importance is akin to recognizing the value of the Internet in the early 2000s, it has immense economic and geo-political importance. For our part, we will dedicate our time and effort to developing products and services for jurisdictions that understand the importance of blockchain technology in a rapidly digitizing world,” the statement concludes.

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