Prominent crypto lending firm Nexo is closing down its business in the United States due to regulatory hurdles.
Announcing the decision via a blog post on Monday, the lender said it will gradually be phasing out its products and services in the U.S. over the coming months as its efforts to “dialogue” with state and federal regulators in the country over the last 18 months have come to a “dead end.”
Nexo did not reveal details of its discussions with the regulators but said it had provided the requested information and adjusted its business operations in response to their concerns.
Halting Access to Earn Product in 8 U.S. States
The lender said due to this regulatory imprecision, its Earn Interest Product will no longer be available to its existing clients in eight US states – Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, California, and Washington – starting Tuesday, December 6, 2022.
The lender previously stopped offering the same to clients from the states of New York and Vermont and closed new registrations for all US clients for the product to “meet regulators’ expectations.”
“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,” Nexo said
Nexo stated that the latest changes only apply to the usability of the Earn Product for citizens and residents of the eight states, adding that clients will continue to have access to other of its products in these jurisdictions until further notice.
Regulatory Scrutiny Intensifies Amid Bear Market
Several crypto lending platforms have been the subject of regulatory backlash over their lending services. The scrutiny around these lenders has further worsened since the implosion of Voyager, BlockFi, Celsius Network, and FTX this year.
Nexo noted that market events over the past few months have also played a role in the regulator’s recent behavior.
“Although regulators initially encouraged our cooperation and a sustainable path forward appeared viable, the events of recent weeks and months and the subsequent change in regulators’ behavior point to the opposite,” Nexo said.
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