Key Takeaways:
- Due to a lack of regulatory clarifications, Nexo has revealed that it will progressively discontinue its services in the United States.
- Only the citizens and residents of the eight states are impacted by these instantaneous differences in terms of the Earn Interest Product’s usability.
The well-known cryptocurrency lending platform Nexo has declared that it will gradually and methodically discontinue “its products and services in the United States over the coming months.”
The business revealed today that its services would be discontinued in the US over the ensuing months. The reason given by the company was that negotiations with American regulatory bodies had broken down.
According to a press release, the decision was made after more than 18 months of sincere communication with US state and federal regulators, which had reached a deadlock. (…) Nexo has made substantial continuing attempts to respond to their issues by preemptively changing its operations and providing the information they have requested.
The company also announced that as of Tuesday, current customers in eight additional states—Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, California, and Washington—will no longer have access to its bestselling interest-bearing investment products. In New York and Vermont, the yield-bearing offering had already come to an end.
State regulators in the US have been closely monitoring lending platforms, particularly after the failure of Celsius and Voyager. The recent FTX fiasco came out to be cherry on top.
In September, Nexo was accused of not having registered its Earn Interest Product by eight U.S. state regulators.
According to the California Department of Financial Protection and Innovation, Nexo’s interest-earning accounts offered interest rates of up to 36% annually. Nexo claimed that the 36% interest rate only applied to one asset and that the high rate was not advertised.
Nexo claims that regulatory authorities at first displayed encouraging signs of collaboration and determining a viable course of action.
But because the regulators “are reluctant to coordinate with one another and are absolutely adamant on taking a stance that are incongruent with one another, fostering an environment in which it is hard to run effectively and deliver the desired value for their client,” it is inconceivable for them to function properly.
According to the crypto lending company, its payment partners have been informed of the change, so customers can withdraw funds in real-time and without interruption.
Nexo argues the US is refusing to offer a way to facilitate blockchain enterprises, so they cannot offer their customers a sense of trust that regulators have their best interests in mind.
