Eight states file enforcement action against crypto lending platform Nexo

Eight states file enforcement action against crypto lending platform Nexo

Eight states announced on Monday they're bringing actions against the crypto lending platform Nexo Group in connection with its unregistered, interest-bearing cryptocurrency product. State regulators in California, Kentucky, New York, Maryland, Oklahoma, South Carolina, Washington and allege Nexo offered customers interest earning accounts without first registering them as securities and providing necessary disclosures. Without access to these financial statements, state regulators say investors could not make informed investment decisions. The filings also state that Nexo misrepresented the accounts, and suggested to investors that they are a licensed and registered platform. These interest earning accounts, known as "Earn Interest Product," allowed investors to deposit assets with Nexo in exchange for earning yields as high as 36% on their deposits. The crackdown comes as handful of recent crypto bankruptcies this year have left investors without access to their funds. Celsius, which offered similar interest-bearing accounts, filed for bankruptcy this summer after freezing customer funds in June. Voyager filed for Chapter 11 bankruptcy in July. The industry saw billions of dollars wiped out during the weeks surrounding the implosion of cryptocurrency Terra USD and Nexo's terms and conditions said the company had the ability to deploy customer assets at its "sole and absolute