Crypto lender Nexo announces departure from the United States following fallout with regulators
|- Nexo had been attempting to find common ground with the state and federal regulators for the last 18 months.
- Nexo halted access to its Earn Interest Product to eight US states on Tuesday.
- Nexo announced their departure at a time when regulators and TradFi players are intensifying their approach toward crypto regulations.
Following FTX's collapse, many crypto companies have borne the brunt of the United States regulators, but Nexo became the first one to stand up against them. Consequently, Nexo also announced a decision that surprised the crypto space.
Nexo bids adieu
Nexo triggered a first-of-its-kind event on December 5 when the crypto lending company announced that it would be pulling out of the United States. The company will be phasing out its products and services over the next couple of months.
Nexo highlighted that the crypto lender has been at the forefront of cooperation with the regulatory authorities for years. Not only did Nexo hold the first Securities and Exchange Commission (SEC) Registered Token Sale in 2018, but it also delisted XRP from its platform as soon as the SEC filed a lawsuit against Ripple.
The lending platform even ceased accepting any new funds into its Earn Interest Product (EIP) after BlockFi was fined $100 million by the SEC.
Regardless, things did not pan out with the regulators, as stated by Nexo, despite deliberations lasting for a year and a half. The Press Release noted,
"Our decision comes after more than 18 months of good-faith dialogue with US state and federal regulators which has come to a dead end. Despite inconsistent and changing positions among state and federal regulators, Nexo has engaged in significant ongoing efforts to provide requested information and to proactively modify its business in response to their concerns."
Nexo also put an end to its EIP service in eight US states, including California and Washington, on December 6.
Regulators strengthen approach
While crypto companies have been finding ways to ensure slightly lesser stricter regulations, regulators have been aiming to strengthen them further. As reported by FXStreet, the Commodity Futures Trading Commission's (CFTC) Chairman, Rostin Behnam, asked for increased authority over cryptocurrency exchanges. Not only this, Behnam even suggested revisiting the Digital Commodities Consumer Protection Act (DCCPA) bill to eliminate any loophole.
Even the Bank of America recently suggested an increased urgency for crypto regulation. This would enable higher participation from institutional investors, which in return would accelerate the maturity of the industry.
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