Ohio has become the latest state to join the nationwide crackdown on Nexo, joining the $22.5 million settlement against the digital asset lender.
Nexo was one of the many casualties of last year’s digital asset lenders’ purge in the U.S. that saw multiple states work together to crack down on BlockFi, Celsius Network—before it collapsed —and others.
As CoinGeek reported in January, the lender settled with multiple states through the North American Securities Administrators Association for $22.5 million. It also pledged to pay the Securities and Exchange Commission (SEC) a similar amount for securities violations.
Ohio has now joined the settlement.
“The Ohio Division of Securities has issued a consent order against Nexo Capital Inc. The Division’s action is part of a nationwide settlement of alleged securities law violations by Nexo in connection with its Earn Interest Product (EIP) accounts,” the watchdog stated.
Nexo failed to comply with state securities registration requirements in Ohio, “depriving investors of important information necessary to understand and evaluate the risks of investing in the Earn-Interest Product (EIP).”
The regulator claims that as of July last year, there were over 2,300 investors in the Nexo EIP from Ohio whose investment was above $15 million.
“All financial services companies, including those offering services for crypto assets, must comply with Ohio’s securities laws. In partnership with NASAA and other state securities regulators, we will continue to protect Ohioans’ investments and ensure that companies operating here follow our securities laws,” Securities Commissioner Andrea Seidt commented.
In addition to the fine, Nexo announced that it would cease offering its EIP products in the United States. All American investors must withdraw their funds and close their positions before April 1, 2023, the company stated.
While it was nailed for securities regulations, regulators accused Nexo of other grievous acts. They include using its native token, NEXO, to cover up for capital deficiencies.
As of July, the Kentucky Department of Financial Institutions alleged that Nexo held 96% of all the NEXO tokens. Excluding this token stash, the company’s liabilities would exceed its assets, Kentucky alleged, which the company refuted.
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