Crypto Loan Platform Nexo Accused of Violating Securities Laws
A lawsuit has been filed against cryptocurrency platform Nexo by eight state securities regulators in the United States: New York, Oklahoma, South Carolina, Washington, California, Kentucky, Maryland, and Vermont.
In a lawsuit filed, state securities regulators are alleging Nexo Inc., Nexo Group and Nexo Capital Inc. for failing to register with them as commodities and securities brokers and misleading investors.
A complaint filed by New York Attorney General Letitia James asks Nexo to forfeit the revenue from its "Earn Interest Product" crypto deposit accounts and reimburse users for their losses.?
Those who held Nexo's EIP accounts were able to deposit crypto assets at the company; they also received interest for those deposits. It was possible for investors to deposit cryptocurrency assets at Nexo and earn 36% interest, a rate that was significantly higher than the interest rate they would receive from short-term, investment-grade securities or a bank savings account.?
“Cryptocurrency platforms are not exceptional; they must register to operate just like other investment platforms,” James explained.?
She added, “Nexo violated the law and investors’ trust by falsely claiming that it is a licensed and registered platform. Nexo must stop its unlawful operations and take necessary action to protect its investors.”
Attorney General James has urged those who have been victimized by deceptive conduct in the virtual asset industry to report it immediately. She encourages cryptocurrency workers to report misconduct or fraud anonymously with her office.
According to its website, Nexo currently supports more than 50 cryptocurrencies, operates in more than 200 jurisdictions, has gained more than 5 million users, and has processed more than $80 billion.
CBW - External Analyst