Nexo pays a $45 million fine to the SEC for failing to register a lending product.

Nexo Capital Inc. has agreed to pay $45M in fines to resolve allegations that the cryptocurrency company failed to register its crypto asset lending product with the US Securities and Exchange Commission (SEC) and state regulators.

According to a statement from the SEC, Nexo has agreed to pay a $22.5 million fine to the SEC as well as an additional $22.5 million in fines to state regulators in connection with its Earn Interest Product offered to American investors.

In the meantime, a Nexo investigation in Europe resulted in four people being indicted by Bulgarian authorities.

On January 12 in Sofia, the capital, authorities conducted a raid at more than 15 of the company's locations, claiming to be looking into the formation of an organized crime organization, tax offenses, money laundering, unauthorized banking, and computer fraud.

According to the SEC, Nexo started to offer its lending product in the US around June 2020, enabling investors to send the business their crypto assets in exchange for the promise of interest. Following a SEC announcement in February 2022 that similar allegations had been made against another company, the corporation stopped marketing the product to new investors.

Nexo declared it was "content" with the settlement but did not accept or reject the SEC's findings. "We are confident that a clearer regulatory landscape will emerge soon, and companies like Nexo will be able to offer value-creating products in the United States in a compliant manner," the company's co-founder Kosta Kantchev said.

Due to disagreements with regulators, the UK-based cryptocurrency lender said last month that it would gradually stop offering its products and services in the United States.

The SEC has been targeting these offerings by cryptocurrency companies over the past year, and in February 2022 it filed its first charges against a BlockFi Inc. affiliate for selling a comparable product.

The SEC filed a lawsuit against Genesis Global Capital LLC and Gemini Trust Company LLC last week regarding their lending product.

Nexo is having issues with other authorities. Four persons were accused last week as part of an investigation into the company by Bulgarian prosecutors.

On January 12 in Sofia, the capital, authorities conducted a raid at more than 15 of the company's locations, claiming to be looking into the formation of an organized crime organization, tax offenses, money laundering, unauthorized banking, and computer fraud.

The company acknowledged that Bulgarian officials were at one of its locations, but insisted that only administrative tasks like payroll and customer support were carried out there.

By fLEXI tEAM