Initially, Nexo is halting its Earn Interest Product in eight states in the US.
Nexo, a crypto borrowing and lending platform established in 2017, is phasing out its products and services in the United States.
According to the blog post shared on December 5th, the decision was made due to a lack of clear regulations in the US, stating that it is “regrettable but necessary.”
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In its blog post, Nexo highlighted that it has been working with US state and federal regulators for 18 months to have a “good-faith dialogue.” However, it highlighted that its attempt to comply with ever-changing regulations has come to “a dead end.” Nexo stated:
Despite inconsistent and changing positions among state and federal regulators, Nexo has engaged in significant ongoing efforts to provide requested information and to proactively modify its business in response to their concerns.
Nexo stated that one of the ways the company attempted to comply with regulations was by halting services to customers in the states of New York and Vermont. On top of that, Nexo suspended new registrations for all US citizens. However, Nexo emphasized for US regulators, it wasn’t enough.
It is now unfortunately clear to us that despite rhetoric to the contrary, the US refuses to provide a path forward for enabling blockchain businesses and we cannot give our customers confidence that regulators are focused on their best interests.
Starting December 6th, Nexo’s Earn Interest Product will be suspended for existing investors in Washington, Kentucky, California, Indiana, Wisconsin, Maryland, South Carolina and Oklahoma.
In the blog post, Nexo highlighted that investors from other states will be able to access the Earn Interest Product until further notice.
Nexo stated that US regulators “initially encouraged our cooperation, and a sustainable path forward appeared viable." However, the recent market turmoil caused by the collapse of FTX created an "impossible environment" for the company to continue operating in the country.