Last Updated: 27 September 2022
The lending platform Nexo is under fire in America. The states of New York and California, among others, are forcing the company to discontinue their interest rate products.
Nexos onder vuur in Amerika https://t.co/04LQD3yXbD
— Crypto Journaal (@CryptoJournaal) September 26, 2022
Nexo Monday is one of many brokers where you can deposit your money in addition to all kinds of other activities. The promise is simple: you deposit money, you receive a certain interest rate. For instance, according to its own website, you can get up to 16% interest on your crypto. Besides bitcoin, you can get your hands on plenty of other tokens there. At least, for now.
Indeed, this business model is under a magnifying glass worldwide. Earlier this year, major companies went bankrupt partly because of these same interest products. A combination of a falling market, falling revenues and a lack of cash are a dangerous cocktail.
In New York, Nexo is accused of selling unregistered securities. You can judge for yourself, with a little creativity, whether a particular token belongs to that or not.
The consequences for Nexo are not yet clear. It is a message we are seeing more and more these days, though. Regulators and regulators are increasingly cracking down on certain crypto companies.
New York Attorney General Letitia James is launching a lawsuit against Nexo: “Nexo violated the law and the trust of investors by falsely claiming to be a licensed and registered platform. Nexo must stop its illegal activities and take the necessary action to protect its investors.”
The state of Vermont also came up with an injunction to stop. Washington did the same. Maryland, Oklahoma, South Carolina and Kentucky are also rumbling around Nexo.