Nexo Fined $45 Million by SEC for Violating Federal Securities Law

• The crypto-lending firm Nexo has agreed to pay fines of $45 million to the Securities and Exchange Commission (SEC) for violating federal securities law.
• The SEC stated that Nexo failed to register its crypto asset lending product and initiated this unregistered security in 2020.
• SEC Chair Gary Gensler suggested that Nexo would cease its unregistered lending product to all US investors.

Crypto-lending firm Nexo has recently come under fire from the Securities and Exchange Commission (SEC) for violating federal securities law. According to the regulatory agency, the firm failed to register its crypto asset lending product, which is an essential disclosure requirement designed to protect investors. This unregistered security was initiated in 2020, allowing US customers to earn.

In response to the situation, SEC Chair Gary Gensler announced that Nexo will be paying fines of $45 million and will cease its unregistered lending product to all US investors. He stated: „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.“

Gensler further suggested that the SEC would remain relentless in holding crypto-operating firms accountable for their actions. He added that the agency was committed to ensuring that the cryptocurrency industry is regulated in a fair and consistent manner.

In addition, the SEC’s Division of Enforcement co-director, Stephanie Avakian, commented on the case. She said: „Investors in securities products must be able to trust that they are doing business with a firm that is following the law. Nexo’s failure to register its retail lending product as a security and provide required disclosures deprived investors of essential information they needed to make informed decisions about their investments.“

The SEC’s enforcement action against Nexo serves as a warning to other crypto firms that they must comply with federal securities laws. It is expected that the agency will continue to take similar actions against firms that fail to register their products or provide necessary disclosures to investors.

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