As per the latest report, crypto lender Nexo is now planning to halt interest offerings on new deposits on the platform. The high interest-yield crypto products have recently attracted the attention of regulatory agencies, especially the U.S. SEC.
Earlier this month, the SEC slapped a $100 million to crypto lender BlockFi on accusations of offering illegal high-yield crypto-lending products. As a result, BlockFi decided to completely stop offering interest-yielding products to Americans.
Walking on a similar path, Nexo seems to take a similar move. As per the Bloomberg report, Nexo posted a statement last Friday to its official subreddit by a moderator who isn’t an employee but says he “closely” works with them.
The subreddit reads that these changes are in place to comply with the latest action of the SEC on BlockFi. Thus, just like BlockFi, Nexo is also working its way to register with the regulator.
The statement reads that Nexo’s existing customers will continue to earn interest on their existing deposits, but that won’t be possible for new deposits and new customers. Meaning, Nexo is kind of suspending the product entirely.
Complying With the Securities Laws
Nexo said that it will discontinue its current offering and will eventually make a new offering available that comply’s with the securities laws. The announcement further notes:
The recently announced changes will be in place “until the restructuring of the Earn Interest Product and the registration process with the relevant regulatory bodies are finalized”.
As per the details on its website, Nexo is currently offering a healthy 20% interest rate annually to its customers. The latest development is only for Nexo’s customers in America. Thus, non-U.S. clients remain unaffected by this offering.
Crypto lending products have been gaining a lot of traction as market participation increases. Furthermore, they help long-term investors simultaneously earn good yields along with their crypto investments.
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Source: https://coingape.com/after-blockfi-episode-crypto-lender-nexo-to-halt-interest-on-new-deposits/