Nexo, a cryptocurrency lender, will cease paying interest on new deposits from US consumers
Nexo announced a series of policy adjustments for US consumers, a move that coincides with the Securities and Exchange Commission’s examination of crypto lending goods and services.
According to an email sent to clients and a post on Nexo’s official subreddit, the policy changes apply to both current and new accounts, with the business stating that it “voluntarily adopted adjustments to its Earn Interest Product in the United States to comply with newly-announced recommendations.”
“Nexo’s registered customers earning interest on the platform will continue to earn interest on their existing digital asset balances exclusively,” the company said.
“After today, any top-ups to your Nexo Wallets will not earn interest until the Earn Interest Product is restructured and the registration procedure with the appropriate regulatory agencies is complete, as per previously obtained instructions. Once completed, all new accounts will be converted to the Earn Interest Product 2.0, which will earn interest on new top-ups. Please keep in mind that if you remove any of the assets in your current balance, you will lose the ability to earn interest on them even if they revert to you.”
“Nexo’s Earn Interest Product in its present form will not be offered to new customers until the Earn Interest Product is restructured and the registration procedure with the appropriate regulatory authorities is completed, as per previously received instructions,” the company said.
“The current adjustments affect solely Nexo’s Earn Interest Product in the United States and have no effect on any other Nexo products,” the statement said. “Clients located outside the United States are not subject to the SEC’s advice and are thus unaffected by any of these changes.”
The timing is noteworthy in light of the SEC’s expanding monitoring of the cryptocurrency lending industry. Earlier this week, crypto lender BlockFi reached a $100 million settlement with the SEC and state securities authorities. Additionally, the company intends to register its BlockFi Yield product as security.
Gary Gensler, chairman of the Securities and Exchange Commission, has highlighted the crypto lending industry as one area that federal regulators are monitoring.
Nexo and crypto loan business Celsius looked to have been under investigation in October in the US state of New York, according to unredacted documents made public at the time. Nexo did not reply to a request for comment immediately.