Crypto Lender Nexo Sued for Blocking Users’ Accounts Holding $126M

A family of fintech entrepreneurs is suing Nexo, one of the leading crypto lenders in the industry, for allegedly refusing to process their withdrawal requests to withdraw up to £107 million ($126 million) of their assets from the platform, City A.M reported.

The plaintiffs, two brothers, Jason and Owen Morton, and their cousin Shane Morton revealed that Nexo blocked their accounts when they requested to pull out the funds and later intimidated them into repurchasing the digital assets at a 60% discount.

Nexo Placed Bespoke Withdrawal Limit on User Account

According to the lawsuit filed at the High Court in London, the Mortons started removing their assets from Nexo in March 2021 after the exchange failed to respond satisfactorily to the investors’ concerns regarding transparency and compliance with financial regulators. The plaintiffs had concerns about Nexo’s regulatory status with the United Kingdom Financial Conduct Authority (FCA), which controls the entire financial market in the region. 

The three brothers moved to sell off their entire holdings consisting of several cryptocurrencies, including Nexo’s native token, NEXO, and Bitcoin (BTC), in tranches so as not to impact the price. The plaintiffs held exactly 38,793,323.7 of NEXO and 281.05 bitcoins.  

In the same month, Nexo suddenly imposed a $150,000 daily withdrawal limit on the user’s account. A move the company claims was an attempt to support the price of NEXO. Shortly after, the investors were completely blocked from using the platform’s withdrawal option and could not swap their tokens for other cryptocurrencies as the company had disabled the convert button option. 

Following the blockage, the plaintiffs reached out to the firm, where they were offered a deal to sell their NEXO tokens at a 60% discount in exchange for removing the $150,000 daily withdrawal limits placed on their accounts. 

The Mortons eventually accepted Nexo’s offer, through which they agreed to sell their NEXO  at a 60% discount on their market price in return for the removal of withdrawal limits. The deal saw Nexo pay the investors $38,948,743 in USDT stablecoin.

Nexo Responds to the Lawsuit

On the other hand, Nexo has acknowledged the lawsuit, arguing that the transactions were closed in good faith. The crypto lender said it was disappointed to see the suit as it already considered the business closed. 

“Nexo considers that the claim has been brought opportunistically, sometime after the events in question took place during 2020 through to March 2021. Nexo had considered the matter closed and was disappointed to see it re-emerge,” said the company. 

The London-based company said it would defend the claim in full through its solicitors, Eversheds Sutherland.

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