• Nexo, a cryptocurrency lender, has decided to stop paying interest on new deposits from customers in the United States

  • Nexo has announced a set of policy adjustments for US customers, as the Securities and Exchange Commission investigates crypto lending goods and services.

    The policy changes apply both existing and new accounts, according to an email issued to users and a message on Nexo’s official subreddit, with the company claiming it “voluntarily adopted adjustments to its Earn Interest Product in the U.S. to comply with newly-announced recommendations.”

    “Nexo’s registered clients who are currently earning interest on the platform will continue to do so only on their existing digital asset balances,” the company said, adding:

    “Top-ups to your Nexo Wallets made after today will not earn interest until the restructuring of the Earn Interest Product and the registration process with the relevant regulatory bodies are complete, as per the recently received guidance. Once complete, all new accounts will be transferred to the Earn Interest Product 2.0 and the new top-ups will earn interest. Please note that if you withdraw any of the assets in your current balance, you won’t be able to earn interest on them even upon their subsequent return.”

    “Nexo’s Earn Interest Product in its current form will not be available for new clients until the Earn Interest Product is restructured and the registration process with the relevant regulatory bodies is completed, as per the recently received instructions,” according to the statement.

    “The current adjustments affect solely Nexo’s Earn Interest Product in the United States and have no bearing on any other Nexo products,” the statement stated. “Non-U.S. clients are not affected by any of these modifications because they are not subject to the SEC’s guidelines.”

    Given the SEC’s expanding control of the crypto lending market, the timing is significant. BlockFi, a crypto lender, reached a $100 million settlement with the SEC and state securities regulators earlier this week. In addition, the company intends to register its BlockFi Yield product as a security.

    The SEC’s chief, Gary Gensler, has mentioned the crypto lending sector as one area that federal regulators are looking into.

    According to unredacted documents made public at the time, Nexo and cryptocurrency loan service Celsius were investigated in the US state of New York in October.

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