Former High-Ranking SEC Official Blasts Crypto Lender Nexos $45,000,000 Settlement Deal With US Regulator

A former high-ranking executive of the U.S. Securities and Exchange Commission (SEC) is calling out crypto lender Nexos multimillion-dollar settlement with the regulatory agency.

According to a new press release, Nexo has agreed to a settlement deal with the SEC for selling unregistered securities that will see it paying the regulatory body $22.5 million.

Furthermore, Nexo will also pay another $22.5 million to settle similar charges levied by state authorities.

The SEC finds that starting around June 2020, Nexo began offering its earn interest product (EIP), which was marketed as a way for traders to earn interest on their digital assets. However, the SEC deemed the EIP as a security, which falls under its jurisdiction and must be registered.

As stated by SEC Chair Gary Gensler in the press release,

We charged Nexo with failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors. Compliance with our time-tested public policies isnt a choice.

However, John Reed Stark, who spent 11 years as the head of the SECs Office of Internet Enforcement, is lampooning Nexos take on the deal, saying that the company referring to the settlement as a victory of innovation is absurd.

Nexo pays a whopping $45 million to the SEC but claims a victory for innovation. Such absurd spin is the latest crypto-trend. BlockFi similarly touted its $100 million SEC penalty as a victory for regulatory clarity.

Just a few weeks before the settlement, Nexo announced that it would be leaving the US due to a lack of regulatory clarity. At the time, the crypto lender also announced that it would cease selling its EIP.

Don’t Miss a Beat Subscribe to get crypto email alerts delivered directly to your inbox

Check Price Action

Follow us on Twitter, Facebook and Telegram

Surf The Daily Hodl Mix

Check Latest News Headlines

&nbsp

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Shutterstock/jovan vitanovski

This article was originally reported on The Daily Hodl.