Nexo Fined $45M for Unregistered Securities Sales by SEC

• The SEC has charged crypto lender Nexo with unregistered security sales, and Nexo has agreed to pay a $45 million fine.
• SEC Chair Gary Gensler noted that Nexo had bypassed essential disclosure requirements designed to protect investors.
• Nexo has also agreed to cease its unregistered lending product to US investors.

Nexo, a cryptocurrency lending platform, has recently been charged by the US Securities and Exchange Commission (SEC) for unregistered security sales. According to the SEC, the crypto firm failed to register its crypto asset lending product and allowed US customers to earn from it without registering. As part of an agreement, Nexo has agreed to pay a hefty $45 million fine and cease its unregistered lending product to all US investors.

In a statement, SEC Chair Gary Gensler commented on the situation, saying: “We charged Nexo with failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors. Compliance with our time-tested public policies isn’t a choice.” Gensler also noted that the SEC would remain relentless in holding crypto-operating firms accountable.

Nexo had launched its crypto asset lending product in 2020, allowing US customers to earn interest on their digital assets. According to the SEC, Nexo had not registered the product with the agency and had not filed a registration statement. The SEC further noted that Nexo had not made the necessary disclosures regarding the product before offering it to the public.

The SEC has been increasingly vigilant when it comes to crypto-related businesses. Earlier this month, the agency had charged Ripple Labs Inc., a digital currency company, with conducting unregistered securities transactions. In a statement, the SEC had noted that Ripple had raised over $1.3 billion through the sale of its XRP tokens without registering the offering with the agency.

The SEC’s enforcement action against Nexo is yet another example of the agency’s commitment to protecting investors and ensuring compliance with US securities laws. Crypto-related businesses should take heed of the SEC’s actions and ensure that they comply with the agency’s regulations. Failure to do so could result in hefty fines and other penalties.