Nexo to terminate yield-bearing product after paying $45 million

After agreeing to pay $45 million in fines to U.S. regulators, cryptocurrency lending company Nexo Capital has decided to end its yield-bearing Earn Interest product for its customers in the United States. This decision will take place approximately one month after the company reached the settlement.

Nexo made the announcement through a blog post on February 10 and said that all production of the product will cease on April 1. By lending particular cryptocurrencies to Nexo, users were able to participate in the scheme and receive daily compounding returns on those coins.

Nexo said that the settlements that it reached on January 19 with the Securities and Exchange Commission and the North American Securities Administrators Association were the reason why it had to discontinue the offering of Earn.

Due to Nexo’s failure to register the offer and sale of its Earn product, the SEC, NASAA, and at least 17 state securities authorities conducted an investigation against the company.

In addition to paying a penalty of $22.5 million and reaching an agreement with the SEC to stop marketing its Earn product to investors in the United States, Nexo also agreed to pay an additional $22.5 million in penalties to address accusations brought by state authorities.

Nexo did not confirm or refute the conclusions of the SEC, but the company did consent to a cease-and-desist order that prevents it from breaching any aspects of securities law.

In accordance with the statement made by Nexo, Earn users will continue to be compensated with interest until April 1st. Nexo encourages consumers to “begin preparing the withdrawal of your monies” before the fixed-term product’s termination date so that they may access the product once it has been unlocked.

According to the company, other Nexo services and products would not be adversely impacted in any way.


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ADDX Introduces Cash Management Tool ADDX Earn

ADDX has introduced a cash management tool for investors, which consists of a solution that aims to withstand short-term volatility while preserving capital.


The new ADDX Earn will provide one more option to investors with excess funds in their wallets to make interest, instead of their funds sitting idle, according to the statement.

Per the private market exchange company, ADDX Earn has been built to boost investors’ returns deposited in their ADDX wallets and has not yet decided on which private market product to take part in. It added that some of the idle capital may also have come from previous investment earnings on ADDX.

The plan of the new management tool is also to beat short-term bank deposit rates by providing higher target returns for products under ADDX Earn. Many investors usually store undeployed capital in short-term bank deposit rates.

“The first two funds to be launched under the ADDX Earn umbrella are by Lion Global Investors, a fund manager that is a part of the OCBC Group,” ADDX said.

The two funds named the LionGlobaI SGD Enhanced Liquidity Fund and LionGlobaI USD Enhanced Liquidity Fund, are diversified over a range of issuers and tenors through investments in high-quality portfolios of debt instruments.

‘The two funds have weighted average portfolio durations of less than a year, which gives Lion Global the flexibility to adjust portfolio allocations in response to changing interest rates and market conditions,” ADDX said.

According to ADDX, investments can be redeemed on a weekly basis.

The funds are also targeting low-volatility assets. These are being done as they are “well-suited” for the current market environment that has seen increased volatility in other asset classes, ADDX announced.

Interest is accrued daily for both funds. As of July 31, the LionGlobaI SGD Enhanced Liquidity Fund had a weighted average yield to maturity of 2.22% p.a., while that of the LionGlobaI USD Enhanced Liquidity Fund was 2.38% p.a. These rates change monthly depending on the prevailing interest rate environment and the underlying assets held by the funds.

Gerard Lee, Chief Executive Officer of Lion Global Investors, said, “our liquidity funds are typically used by financial advisers and digital players. We are therefore delighted to have a private market exchange use our liquidity funds to provide a solution for their investors’ excess cash.”

The SGX-backed ADDX was founded in 2017. It is currently serving individual investors from 39 countries across the Asia Pacific, Europe and the Americas – except the US.

The company has started using blockchain and smart contract technology to reduce manual interventions in issuing, custody and distributing private market products.

Image source: Shutterstock


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SEBA Bank launches problems for users to earn yield on crypto

Customers of Swiss-based financial institution SEBA Bank will soon be able to earn yield on their crypto holdings.

In an Oct. 13 announcement, SEBA Bank said investors could use its Bitcoin (BTC) and Ether (ETH) lending services to generate yields as part of its SEBA Earn program. According to the bank, which focuses on offering digital assets, it planned on integrating support for other cryptocurrencies.

“As institutional interest in digital assets accelerates, investors have a broader appetite for crypto assets, with a particular interest in earning services like staking, DeFi and centralized crypto borrowing and lending,” said SEBA Bank CEO Guido Buehler.

SEBA said institutions would be able to earn returns through its staking and decentralized finance, or DeFi, problems, in addition to centralized lending and borrowing. Customers can currently generate yields on Polkadot, Tezos and Cardano, but the bank said it planned to add more proof-of-stake protocols in the coming months.

Related: First cryptocurrency fund approved in Switzerland

One of the first banks focused on digital assets to acquire a custody license in Switzerland, SEBA has been involved in the crypto space since its founding in 2018. Last year, the Bank of France selected SEBA to participate in its experimental digital Euro pilot project aimed at exploring the feasibility of central bank digital currencies in cross-border payments.