A former high-ranking executive of the U.S. Securities and Exchange Commission (SEC) is calling out crypto lender Nexo’s multimillion-dollar settlement with the regulatory agency.
According to a new press release, Nexo has agreed to a settlement deal with the SEC for selling unregistered securities that will see it paying the regulatory body $22.5 million.
Furthermore, Nexo will also pay another $22.5 million to settle similar charges levied by state authorities.
The SEC finds that starting around June 2020, Nexo began offering its earn interest product (EIP), which was marketed as a way for traders to earn interest on their digital assets. However, the SEC deemed the EIP as a security, which falls under its jurisdiction and must be registered.
As stated by SEC Chair Gary Gensler in the press release,
“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.”
However, John Reed Stark, who spent 11 years as the head of the SEC’s Office of Internet Enforcement, is lampooning Nexo’s take on the deal, saying that the company referring to the settlement as a victory of innovation is absurd.
“Nexo pays a whopping $45 million to the SEC but claims a victory for ‘innovation.’ Such absurd spin is the latest crypto-trend. BlockFi similarly touted its $100 million SEC penalty as a victory for ‘regulatory clarity.’”
Just a few weeks before the settlement, Nexo announced that it would be leaving the US due to a lack of regulatory clarity. At the time, the crypto lender also announced that it would cease selling its EIP.
Follow us on X, Facebook and TelegramDon't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/jovan vitanovski
