The lender of cryptocurrencies link it will leave the United States in the coming months after the company was unable to reach an agreement with the country’s regulators.
In a blog post on Monday, Nexo said it would “phase out its products and services in the US in a phased and orderly manner over the next few months.”
Nexo said its choice was justified by the “inconsistent and changing positions of state and federal regulators,” which the company said it has been trying to consider as it adjusts and changes its businesses.
However, their efforts appear to have been in vain:
“Our decision comes after more than 18 months of good-faith dialogue with US regulators that reached a deadlock.”
Therefore, as part of this phased release, starting today, Nexo’s Earn Interest product will no longer be available to customers in eight US states: Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, California and Washington .
“In the meantime and until further notice,” he added, these customers will still have access to all other Nexo products available in the aforementioned jurisdictions.
The company suggested that when it comes to the cryptocurrency industry, the United States speaks more than it does and may not have the best interests of cryptocurrency users in mind:
“It is now sadly clear to us that, despite rhetoric to the contrary, the US refuses to provide a path forward for blockchain firms to operate, and we cannot provide our clients with assurance that regulators are focusing on their best interests.” interests”.
The company added that its payment specialists have been notified of the decision and will continue to process withdrawals in real time to ensure customers have “uninterrupted access” to their resources.
“Regulators create an impossible environment to operate effectively”
Regulators initially encouraged cooperation, Nexo said, and a resolution seemed in the offing, however, recent events and their changing behavior have indicated otherwise.
Nexo said it has two main goals when discussing with regulators:
- Past: Resolving any regulatory issues with Nexo products historically available in the United States;
- Future: Finding a way for Nexo services, especially the Earn Interest product, to be available in the United States “compliantly and continuously.”
Nexo says it has acted in response to concerns from US regulators and evolving positions, including:
- The registration of its symbolic sale with the Securities and Exchange Commission (SEC) of the United States in 2018;
- The highly controversial decision to disable trading functionality for XRP in the US following the SEC lawsuit filed against Ripple ;
- The discontinuation of new registrations for the Earn Interest product;
- Suspension of New York State and Vermont User Accounts.
That being the case,
“We have reached a point where regulators refuse to coordinate their actions and insist on taking positions that are incompatible with each other, creating an impossible environment to operate effectively and create the expected value for our clients” .
The straw that broke the camel’s back was the decision of the Consumer Financial Protection Bureau (CFPB) on Thursday saying it has the jurisdiction to investigate the Earn Interest product – as the SEC and state regulators have insisted it is a security within their jurisdictions.
In addition, “a number” of securities regulators Nexo has partnered with for several months have filed lawsuits against it, without notice, the platform said.
In late September, Nexo received a cease and desist order from the California Department of Financial Protection and Innovation (DFPI), alleging that Nexo has been offering and selling “nonqualifying securities” through the program in violation of the California Cooperation Code.
According to Reuters, eight US state regulators accused Nexo of failing to register its product of interest.
The price of the Nexo platform’s native token, NEXO, fell 5.7% in a day and less than 1% in a week, currently trading at $0.658. It’s down 35% in one month and 71% in one year.
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