Nexo, one of the leading crypto lending institutions in the digital finance industry, announced it has decided to halt its services in the U.S. after regulators “dropped the ball” in dialogues meant to give blockchain businesses a clear path moving forward, Reuters and other news outlets reported Tuesday.
The Swiss crypto lender founded in 2018 has expressed what could only be described as its disappointments after participating in a series of talks with state and federal regulators for 18 long months that now apparently was heading nowhere.
On December 5, the company said:
“Today we are announcing the regrettable but necessary decision that Nexo will be phasing out its products and services in the United States in a gradual and orderly fashion over the coming months.”
Within the negotiations that spanned for more than a year and a half, the firm said it did what was asked of it, providing vital information and implemented modifications in its operations to address the concerns of regulators.
Even with this, Nexo felt it has already hit a wall and have sensed the other party is unwilling to meet them halfway.
In its official blog, Nexo said:
“It is now unfortunately clear to us that despite rhetoric to the contrary, the U.S. 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.”
Nexo Addresses Supposed ‘Violations’
Back in September, the Nexo was accused of “violating” the law by gaining the trust of investors with its false claims of being a licensed and registered platform.
Moreover, a total of eight states, namely California, Kentucky, New York, Maryland, Oklahoma, South Carolina, Washington and Vermont, collectively moved to sue Nexo for allegedly offering interest-earning accounts with the use of “unregistered” securities.
The company said it has addressed this issue, suspending registrations of new U.S.-based accounts for its Earn Interest Product and off-boarding some of its clients from the states of Vermont and New York just to show its cooperation with regulators.
Nexo added that regulators seemed to be not on the same page as they continue to take positions that don’t get along with the others, creating an environment that is no longer healthy for an efficient operation of business.
Nexo is making a foray into Italy. Image: TravelPulse.
Nexo: Italy, Here We Come!
Although experiencing a setback in its operation following the recent turn of events in the U.S., Nexo continues to expand its reach, this time offering its crypto-related products to Italy.
Back in October 28, the company, which is the proud owner of 50 licenses worldwide, registered with the Italian regulator Organismo Agenti e Mediatori (OAM) to be granted permit to serve customers that reside in the country.
With the OAM registration, Nexo has agreed to be subjected to the nation’s anti-money laundering requirements just like the rest of other companies that have already secured the necessary permits to do business within the territory. The list includes firms such as Gemini, Binance, Coinbase and Coinify.
This only proves that while the crypto lender has lost a potentially big market in U.S., it will continue to scout for viable places of business where it will be given the kind of environment it needs to thrive at what it does.
Crypto total market cap at $808 billion on the daily chart | Featured image: Cryptopolitan, Chart: TradingView.com
Share this article: