On February 28th, the Ohio Division of Securities announced it is joining a nationwide settlement with the cryptocurrency lender Nexo. In January, Nexo agreed to pay a total of $45 million in penalties in order to settle the allegations of an unregistered securities offering.
Ohio Joins Multistate Settlement With Crypto Lender Nexo
In January, the SEC announced that the cryptocurrency lender Nexo had agreed to pay $45 million in penalties and discontinue its Earn Interest Product through which it allegedly made an unregistered securities offering. The settlement involves the Commission, as well as multiple state regulators, as well as the regulators of the territories of Puerto Rico and US Virgin Islands, and the District of Columbia.
On February 28th, the Ohio Division of Securities announced it has joined the settlement by sending a consent order to the Cayman islands-based cryptocurrency lender. According to the release, there were 2,327 Earn Interest Product accounts from residents of Ohio on July 31st, 2022, holding $15,858,147.
According to the settlement from January, Nexo agreed to pay a total of $45 million—$22.5 million to the SEC and the same amount to other relevant jurisdictions. Nexo is also to discontinue its Earn Interest Product. Already in early December, the cryptocurrency lender revealed it will leave the US market due to regulatory pressure.
Nexo To Leave the US Citing Issues With Regulators
The previous year—as well as the first months of 2023—saw a large number of high-profile regulatory actions with the most recent one coming in the form of a settlement with Kraken over its staking service. As a result of the pressure on the entire industry, as well as a number of actions directed at itself, Nexo announced a departure from the US in late 2022.
Already in September, eight US states sued the cryptocurrency lender alleging its Earn Interest Product is in violation of state regulations. The multistate action was compounded by an investigation of the very same product undertaken by the Consumer Financial Protection Bureau (CFPB) and the combined actions caused the company to state that the US watchdogs are “creating an impossible environment to operate efficiently and to create the expected value” for the clients.
The US regulators have been facing similar criticism from various companies and lawmakers throughout the country. After the settlement with Kraken, an SEC Commissioner voiced her disagreement with the agency’s tendency to inform the public on policy through enforcement actions calling the approach “lazy and paternalistic”. Additionally, many have voiced their concern that the aggressive behavior of regulators will cause the US to fall behind other countries when it comes to the development of digital assets, and the blockchain more broadly.
This article originally appeared on The Tokenist
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