State Enforcement Actions Target Crypto Securities Violations And Crypto Scams

Earlier this week, New York Attorney General Letitia James joined the California Department of Financial Protection and Innovation (DFPI) and six other state regulatory bodies in filing a suit against Nexo Capital Inc. (Nexo) for failing to register as a securities or commodities broker-dealer and for lying to investors about its registration status. The lawsuit, filed in New York County State Supreme Court, alleges that Nexo promoted and sold unregistered securities in the form of an interest-bearing cryptocurrency account called the "Earn Interest Product." The company allegedly promised investors high returns while failing to register as a securities broker-dealer as required by state law. The state securities regulators of California, Kentucky, Maryland, Oklahoma, South Carolina, Washington and Vermont all filed their own administrative actions against Nexo.