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ARTICLE · 09 FEBRUARY 2023

The SEC And State Regulators Target Crypto Lending In Nexo Settlement

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On January 26, 2022, the California Department of Financial Protection and Innovation (DFPI) announced its participation in a $22.5 million multi-state settlement with Nexo Capital Inc.

United StatesTechnology
F. Phillip Hosp V
F. Phillip Hosp V
Patrick Daugherty
Patrick Daugherty
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On January 26, 2022, the California Department of Financial Protection and Innovation (DFPI) announced its participation in a $22.5 million multi-state settlement with Nexo Capital Inc. (Nexo) relating to unregistered securities offerings in connection with the company's retail crypto lending product. In a parallel action filed by the Securities and Exchange Commission (SEC), Nexo agreed to pay the SEC an additional $22.5 million in fines to settle similar charges. In both cases, regulators alleged that Nexo offered and sold its "Earn Interest Product" (EIP) accounts to new and/or existing investors in the United States, which allegedly enabled investors to passively earn interest by loaning certain digital assets to Nexo.

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