By Chris Prentice
NEW YORK (Reuters) – Nexo Capital Inc has agreed to pay $45 million in penalties to settle charges from the U.S. Securities and Exchange Commission and state regulators that the crypto firm failed to register its crypto asset lending product, the SEC said on Thursday.
Nexo has agreed to pay a $22.5 million penalty to the SEC and another $22.5 million in fines to state regulators in relation to its Earn Interest Product to U.S. investors, the SEC said in a statement.
Nexo began to offer its lending product around June 2020, allowing U.S. investors to give their crypto assets to the company in exchange for a promise of interest, the SEC said. The company ceased offering the product to new investors after the SEC announced similar charges against another company in February 2022.
The UK-based crypto lender said last month it would phase out its U.S. products and services over the coming months due to clashes with regulators.
Nexo did not admit or deny the SEC’s findings.
The securities regulator has been targeting such offerings by crypto firms over the last year, bringing its first charges against a subsidiary of BlockFi Inc for selling a similar product in February 2022.
Last week, the SEC sued Genesis Global Capital LLC and Gemini Trust Company LLC for their lending product.
(Reporting by Chris Prentice in Washington; Editing by Matthew Lewis)