- Nexo has said that it is quitting the U.S., blaming regulators’ shifting position on crypto products
- The “regrettable but necessary” decision comes after it received eight cease-and-desist orders in September
- Nexo said that its dialogue with regulators had “come to a dead end”
Lending platform Nexo is winding down its U.S. operations two months after it was hit with eight simultaneous cease-and-desist orders in the country. Nexo called the decision to exit the U.S. “regrettable but necessary”, putting the blame on the intransigence of American regulators when it came to the Nexo business model. Nexo bought a stake in U.S. bank Hulett Bancorp at the same time as its cease-and-desist orders came through, but the fate of this deal was not discussed in Nexo’s communications over its U.S. exit.
Dialogue Has Come To “Dead End”
Nexo began its U.S. operations in 2018, but the recent crackdown of purported securities across the country saw Nexo caught up in the net, with the mass cease-and-desist operation taking place in September this year. At the time, Nexo insisted that its products did not fall into the bracket of securities, and added that it had been “working with U.S. federal and state regulators” to make its products legal.
However, these discussions seems to have broken down, according to Nexo’s blog post announcing its decision to leave the U.S.:
Our decision comes after more than 18 months of good-faith dialogue with US state and federal regulators which has come to a dead end. Despite inconsistent and changing positions among state and federal regulators, Nexo has engaged in significant ongoing efforts to provide requested information and to proactively modify its business in response to their concerns.
It is now unfortunately clear to us that despite rhetoric to the contrary, the US refuses to provide a path forward for enabling blockchain businesses and we cannot give our customers confidence that regulators are focused on their best interests.
This strongly worded statement echoes the thoughts of many frustrated crypto projects with U.S. exposure, as well as those fighting for regularity clarity over the blockchain space. Nexo signed off by saying that it had “reached a point where regulators are unwilling to coordinate with one another, and are insistent on taking positions that are inconsistent with one another”, which it said created an “impossible environment” in which to operate efficiently.
As a result of its decision, Nexo’s Earn Interest Product will be immediately unavailable in 10 states, although all other Nexo products will be available until further notice.
