Nexo lends resources to investors in order to make a margin with which to earn money for itself and lavish interest on its customers.
The practice was and still is in use on other platforms, and Nexo is among that small group that survived the Earth and FTX factors that took out companies like Voyager or Celsius.
Although the lender enjoys excellent health in America there is no shortage of problems, and the company has decided to take them head-on.
Nexo’s problems with regulators
After an intense confrontation over the past 18 months, the U.S. government, the Securities and Exchange Commission, and the dealer have failed to reach an agreement, and so Nexo is forced to phase out the products and services it bestows on American soil in the months ahead.
“they refuse to provide a path to enable blockchain businesses”
This is the accusation coming from the walls of Nexo highlighting how regulators do not want to remedy the situation in any way.
“Our decision comes after more than 18 months of good faith dialogue with U.S. state and federal regulators, which has reached a dead end. The state and federal regulators had inconsistent and shifting positions and now cannot give our customers confidence that the regulators are focusing on their best interests.”
This is what the lending platform stated.
Nexo’s homegrown Earn Interest will be blocked in eight states, Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, Washington, and California, and will no longer allow U.S. customers either to enroll or earn interest for those already enrolled.
No blocking of withdrawal or deposit consultation operations, they clarified from the company.
Just in California, but also in other states of the subcontinent there have been legal actions against Nexo Group i.e., Nexo’s parent company.
The reason for the litigation brings back memories and finds affinities with the XRP case with Ripple Labs.
Basically for U.S. regulators, SEC over all Nexo’s Earn Interest product was nothing more than an unregistered security.