January 20 (SeeNews) - Bulgaria-founded cryptocurrency firm Nexo's unit Nexo Capital Inc has agreed to pay an overall fine of $45 million (41.5 million euro) to the US Securities and Exchange Commission (SEC) and US state regulators as a penalty for failing to register its crypto asset lending product, the SEC said.
To settle the charges brought on by the federal financial regulator, Nexo Capital agreed to pay a $22.5 million fine to the SEC and $22.5 million to state regulators for having marketed its Earn Interest Product (EIP) without the required registration, the SEC said in a press release on Thursday. Nexo started offering the EIP to US investors in June 2020, but voluntarily ceased to do so after the SEC brought similar charges against a different company in February 2022.
In a separate statement, Nexo said that it reached settlements with the SEC, the North American Securities Administrators Association (NASAA) involving all 50 states and three territories, as well as with the Attorney General of New York, the Texas Department of Banking, the Washington Consumers Services Division and the Alaska Division of Banking and Securities. The settlements are on a "no-admit-no-deny basis", the company noted.
In December, Nexo announced the "regrettable but necessary decision" to wind down its US operations in the next few months, just two months after buying into US Hulett Bancorp (DBA Mode Eleven), the holding company of federally chartered Summit National Bank. The deal happened around the same time as eight US states filed legal charges against a Cayman Islands-registered entity in the Nexo group.
Last week, Bulgarian authorities raided the Bulgarian offices of Nexo as part of a large-scale international operation against alleged financial crimes.
($ = 0.9218 euro)