- Nexo had bought a stake in a U.S. bank, with the announcement coming a day after it was hit with eight cease-and desist orders
- The purchase of a stake in Hulett Bancorp will allow it to offer services to U.S. citizens through a federally regulated institution
- The move couldn’t have been better timed and is a perfect response to the cease-and-desist orders
Nexo announced the purchase of a stake in a U.S. bank just one day after being hit with eight simultaneous cease-and-desist orders over one of its lending products. The lending company announced the acquisition of a stake in Hulett Bancorp (DBA Mode Eleven) and its subsidiary, federally chartered bank Summit National Bank, yesterday, barely 24 hours after eight states had censured it for offering interest-earning products without a licence. The move is the perfect response from the company, with the bank in question regulated by the U.S. Office of the Comptroller of the Currency.
Nexo Expands U.S. Footprint
Nexo announced the deal on Tuesday, but it was drowned out by the larger news of the cease-and-desist orders which hit the day before. In a press release, Nexo said that the acquisition would allow it to offer its U.S. retail and institutional clients services such as bank accounts, asset-backed loans, card programs and escrow and custodial solutions through Summit National, with the bank redefining itself as a modern digital fintech bank in the process.
Perfect Response to Cease-and-desist Orders
Nexo was very clear in pointing out the bank’s regulatory chops, noting that “the leadership of Mode Eleven and Summit National Bank bring a strong record of compliance with U.S. regulatory requirements as the bank expands into new lines of business.”
The move, which obviously had been in the works for some time, is the perfect response to the claims made by the eight states, including from New York’s Attorney General Letitia James, who said that Nexo “violated the law and investors’ trust by falsely claiming that it is a licensed and registered platform”.
