One of the biggest players in the embattled digital asset lending space, Nexo, is halting its interest-bearing products in the United States.
In a recent update, Nexo revealed that its decision to exit the U.S. market resulted from its settlement with the U.S. Securities and Exchange Commission (SEC) and state regulators. It will cease offering all its interest-bearing products on April 1, 2023.
“…we would now like to inform you that we will be stopping our Earn Interest Product for all US clients, which includes US citizens and US residents (including US territories) on April 1, 2023, and all fixed terms will then be unlocked. As you are a US client, we ask that you begin planning the withdrawal of your funds at a convenient time by this date,” the company stated.
As CoinGeek reported last month, the SEC charged the lender with the illegal offer and sale of unregistered securities through its Earn Interest Product (EIP).
Nexo agreed to settle, forking out $22.5 million to the SEC and a similar amount to regulators in all 50 states who had brought a parallel action against the company. The company also agreed to withdraw its EIP products from the U.S. as part of the settlement.
The SEC was more lenient with Nexo, given BlockFi had to pay more than twice this amount in its settlement a year earlier.
Nexo’s U.S. customers will continue to earn the same interest they’ve been getting up until April 1. The company also claimed that the settlement wouldn’t affect any of its other products and would continue serving its U.S. customers. However, its main appeal was its sky-high interest rates, and the withdrawal of its EIP product.
Nexo remains one of the few digital asset lenders still in operation, with most of its peers filing for bankruptcy within the past year. Celsius Network collapsed last July after years of gross mismanagement by Alex Mashinsky and his cronies, while BlockFi was dealt its last blow by the FTX blow-up.
Watch: Law & Order Regulatory Compliance for Blockchain & Digital Assets
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
