Nexo to Pay $45M Penalty for Selling Unregistered Securities to SEC

• The Securities and Exchange Commission (SEC) charged Nexo with selling unregistered securities on 19 January 2023.
• Nexo has agreed to settle with the SEC by ceasing the interest program and paying a $45 million penalty.
• Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, stated that all firms trading securities are subject to the law and must comply with the SEC’s expectations.

The Securities and Exchange Commission (SEC) has charged Nexo with selling unregistered securities on 19 January 2023. According to the SEC, the Nexo Earn Interest product offering and sale did not qualify for an exemption from SEC registration, which meant that Nexo was required to register its offer and sale, but did not do so. Nexo launched its Earn Interest product in June 2020 and the SEC has now taken action against the company.

Nexo has agreed to settle with the SEC by ceasing the interest program and paying a $45 million penalty. This is in addition to a $22.5 million settlement with state regulators. Thus, Nexo has to pay a total amount of $45 million. Earlier this month, Bulgarian authorities claimed that they had no proof of Nexo customers using the platform for illegal activities such as money laundering, tax evasion, and terrorist financing. However, Nexo refuted these allegations.

Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, spoke on the matter and stated: „If you’re offering or selling products that constitute securities under well-established laws and legal precedent, then no matter what you call those products, you’re subject to those laws and we expect compliance.“ Grewal further mentioned that the SEC would continue to hold crypto firms trading securities accountable under the law. This is to ensure that all firms trading securities are subject to the law and must comply with the SEC’s expectations.

The SEC has urged Nexo to cease its interest program and pay a hefty penalty for failing to register its offer and sale of securities. This is to ensure that all firms trading securities are subject to the law and must comply with the SEC’s expectations. Furthermore, Bulgarian authorities previously claimed that they had no proof of Nexo customers using the platform for illegal activities such as money laundering, tax evasion, and terrorist financing. However, Nexo refuted these allegations.

It is clear that the SEC is committed to protecting investors and taking strong action against firms that fail to comply with the law. Thus, it is important for firms to ensure that they are following all applicable laws and regulations in order to avoid any potential penalties.