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

by Blockchain NewsFebruary 13, 2023

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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Nexo Capital to Pay $45 Million in Penalties

by Blockchain NewsJanuary 20, 2023

Due to Nexo Capital’s failure to register the offer and sale of its Earn Interest Product, the United States Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) have agreed to levy penalties against the cryptocurrency lender in the amount of $45 million (EIP).

On January 19, the SEC and the NASAA each released their own statement announcing the news to the public.

According to the statement released by the SEC, Nexo has come to an agreement with the agency to make a penalty payment of $22.5 million and to discontinue its unregistered offer and sale of the EIP to investors in the United States.

According to the article, the extra fine amount of $22.5 million will be paid to address comparable allegations brought forth by state regulatory agencies.

According to a statement released by NASAA, the settlement in principle was reached following investigations into Nexo’s allegedly fraudulent offer and sale of securities that took place over the course of the previous year. During the course of the inquiry, it was found out that EIP investors had the potential to receive interest on digital assets that they had lent to Nexo in order to generate passive income. “Nexo exercised complete autonomy in determining which operations would generate money and be used to generate returns for investors.

Through its website and other social media platforms, the firm sold and advertised the EIP as well as other goods to potential investors in the United States. The company suggested, in certain circumstances, that potential investors might get returns of up to 36% “that was said.

The Securities and Exchange Commission (SEC) noted that throughout the negotiating process for the settlement, the commission took into account Nexo’s degree of cooperation as well as the corrective actions that were swiftly implemented by Nexo in order to remedy their deficiencies.

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Tagged : Altcoin / Blockchain / Business / Government / Lending / News / Nexo / Regulation / SEC / Us Government

“Insolvency, Bankruptcy is Nowhere in Nexo’s reality”: Co-Founders

by Blockchain NewsOctober 6, 2022

Speculations about crypto lender Nexo heading towards bankruptcy were squashed by the company’s top-ranking members.

In an ‘Ask-Me-Anything’ YouTube video on Tuesday co-founders of Nexo, Antoni Trenchev and Kalin Metodiev addressed a series of inquiries, where one participant asked whether their lending platform could be the next Celsius Network Ltd. or Voyager Digital Ltd., both of which filed for bankruptcy earlier this year.

Metodiev replied, “Insolvency, bankruptcy is nowhere in Nexo’s reality.”

He added, “We work very hard that we deliver a very strong and sustainable future for our users for many years to come, enriched with a number of additional services and products through integration of technology and disruption of existing services.”

Following that, Trenchev echoed a similar opinion saying the company had “no exposure to the Terra and Luna debacle”. He also pointed out that Nexo has not lent to the bankrupt crypto hedge fund Three Arrows Capital.

In recent months, Nexo has positioned itself as a potential acquirer of ailing cryptocurrency companies. In August, Nexo approved a $50 million token buyback program. Nexo had previously completed a $100 million buyback in May.

The Switzerland-based crypto lending platform is instead heading towards expansion into industries like trading as well as the development of wealth and asset management solutions in traditional capital markets, the two co-founders said.

Yet, Nexo was called out by regulators from eight US states last month for offering interest-earning accounts without registering the investment products as securities. Following this Nexo had to fight against a cease and desist order filed by the regulators from California, Kentucky, Maryland, New York, Oklahoma, South Carolina, Vermont, and Washington.

Nexo’s yield accounts were marketed and used by retail investors.

In another development last month, Nexo announced the acquisition of a stake in Wyoming-based Summit National Bank, expanding its footprint in the US region.

Nexo has taken a stake in the US federally chartered bank regulated by the Office of the Comptroller of the Currency by acquiring a stake in Hulett Bancorp. Hulett Bancorp is a holding company that controls Summit National Bank.

Specific terms of the deal were not disclosed to the public. The company stressed that the mutually beneficial impact the equity acquisition will have on the clients of both companies should be the focal point of the deal instead of the size of the deal.

Nexo will announce more plans in the coming months to expand its new customers in the US and expand its addressable market in the country, the company said.

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Tagged : ANTONI TRENCHEV / Crypto / Industry Expert / KALIN METODIEV / Nexo

“Insolvency, Bankruptcy is Nowhere in Nexo’s reality”: Co-Founders

by Blockchain NewsOctober 6, 2022

Speculations about crypto lender Nexo heading towards bankruptcy were squashed by the company’s top-ranking members.

Metodiev replied, “Insolvency, bankruptcy is nowhere in Nexo’s reality.”

Last month, Nexo was called out by regulators from eight US states for offering interest-earning accounts without registering the investment products as securities. Following this Nexo had to fight against a cease and desist order filed by the regulators from California, Kentucky, Maryland, New York, Oklahoma, South Carolina, Vermont, and Washington.

Nexo’s yield accounts were marketed and used by retail investors.

In another development last month, Nexo announced the acquisition of a stake in Wyoming-based Summit National Bank, expanding its footprint in the US region.

Nexo will announce more plans in the coming months to expand its new customers in the US and expand its addressable market in the country, the company said.

Image source: Shutterstock

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Tagged : Bitcoin / Blockchain / Crypto / Industry Expert / Nexo

Users Panic as Nexo Withdraws 7,758.8 WBTC from MakerDAO

by Blockchain NewsOctober 2, 2022

There has been panic in the digital space amidst rumors of Nexo being insolvent due to the abrupt withdrawal of Wrapped Bitcoin (WBTC) from MakerDAO with an address labeled as Nexo Ox8fd.

This comes just a few days after market analysts predicted a 50% drop in the price of Nexo.

According to reports gotten from sources, approximately $151 million worth of WBTC was withdrawn on Friday from MakerDAO from the Nexo wallet.

While many users believe the sudden withdrawal is a fraudulent move by the company, a Nexo spokesperson has highlighted that the withdrawn funds are still in the public space (Nexo wallet) adding that;

“the withdrawal was a routine transaction and represents a loan repayment according to the latest market dynamics and the company’s normal asset management.”

Nexo has continued to provide professional financial services to the digital economy since 2018. Nexo is among the world’s most trusted financial institutions that provides lending services in the digital finance industry. According to the firm, it has more than 5 million users around the world transacting with about 40 fiat currencies across more than 200 jurisdictions.

Crisis in the Digital Assets Economy

The recent uproar comes after a number of recent crypto bankruptcies have left investors without access to their funds this year. Nexo customers are seriously in dismay considering that Celsius Network which offers a similar offering to Nexo filed for bankruptcy after freezing customers’ accounts in June.

About eight states in the United States had earlier in September filed proceedings against Nexo as regards registration and cryptocurrency products yielding interests.

According to state regulators in New York, Kentucky, California, Maryland, Oklahoma, South Carolina, Washington, and Vermont, Nexo offered users accounts earning interests without registering them as securities and without providing required information.

Investors, according to state regulators, cannot make informed investment decisions without access to these financial statements.

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Tagged : Celsius Network / MAKERDAO / News / Nexo

Nexo Allocates Additional $50M to Long-standing Token Buyback Initiative

by Blockchain NewsAugust 31, 2022

Switzerland-based crypto lending firm Nexo announced on Tuesday that it approved an additional $50 million for its token buyback program.

The development follows the previous $100 million Buyback which Nexo completed in May this year.

The crypto lender said on Tuesday that it will purchase $50 million worth of its native token NEXO over the next six months.

According to the terms of the buyback program, the firm is now authorized, at the company’s discretion, to periodically repurchase NEXO on the open market.

The repurchase is expected to be completed within the next six months after which the Nexo Board of Directors may decide on whether or not to prolong the buyback.

Antoni Trenchev, Nexo Co-Founder and Managing Partner talked about the development: “The allocation of an additional $50 million to our buyback plan is a result of our solid liquidity position and Nexo’s ability and readiness to spur on its own products, token, and community, alongside its outward-facing initiatives of injecting liquidity into the industry.”

The NEXO Token is the company’s native cryptocurrency which enables token holders to access numerous benefits on the platform.

The NEXO token is an Ethereum-based ERC-20 token used to pay out dividends (interests) from earnings on the platform. The token is currently trading at $0.982 with a market capitalization of $549 million and has risen 4.35% over the past 24 hours.

The firm said it won’t be able to use those repurchased tokens immediately, as it will send the repurchased tokens (buyback tranche) to the company’s Investor Protection Reserve (IPR) with a vesting period of a minimum of 12 months.

The company said that the repurchased tokens will be used for strategic investments via token mergers, and also for daily interest payouts to clients who receive their yields in NEXO.

Trenchev said the ongoing difficult market conditions have consistently moved the NEXO Token consistently with the likes of Bitcoin and Ethereum, thus demonstrating the demand for the company’s native asset remains strong. The executive said that the token buyback will ensure added stability as the company emerges from the current market crash.

Crypto credit crisis

Nexo so far has avoided drastic moves associated with the current market downturn and appears to have remained unaffected by some of the worst debacles.

The crypto lending platform managed to avoid headlines in the multibillion-dollar crash of the Terra blockchain and the collapse of the crypto hedge fund Three Arrows Capital.

This year’s crash in crypto prices has adversely impacted retail depositors while big industry players experiencing huge losses on assets they had lent out in search of yields.

Crypto lenders such as Celsius Network, Voyager Digital, among others, froze withdrawals and later declared bankruptcy.

But Nexo has positioned itself in recent months as a potential acquirer of ailing crypto companies.

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Tagged : BUYBACKINITIATIVE / Crypto / News / Nexo / Token

Nexo Offers to Acquire Vauld Group after Celsius’s Cold Treatment

by Blockchain NewsJuly 6, 2022

Nexo’s plan to buy a cryptocurrency lender may be coming to fruition as the company has shown interest in acquiring Vauld Group.

This development comes after Vauld Group announced earlier this week that it has halted withdrawals and other operations on its platform in the wake of the ongoing onslaught in the digital currency ecosystem.

According to a report from The Block, Nexo has signed an indicative term sheet with Vauld with a plan to acquire up to 100% of the Singapore-based company. Without financial terms revealed, the company said it will review Vauld Group’s balance sheet over the next 60 days in order to ascertain how best to support the ailing company.

“We have to see what exactly is on their books and it’s going to take a little while,” Nexo co-founder Antoni Trenchev said in an interview. “But since we have the exclusive exploratory period, we are the only ones looking at them right now.”

As a crypto lending platform, Vauld Group said it became severely distressed when it witnessed massive withdrawals to the tune of $198 million following the collapse of Terraform Labs’ LUNA and UST digital currencies. As it was unable to handle the liquidity pressures, it had to suspend its core operations.

According to Trenchev, Nexo will examine all aspects of the company’s previous asset base including whether it has long-term staked coins or other investments.

“We have to view it in the overall context of if we step in, can we restructure the business so that it is functioning again, so that it is profitable within the Nexo umbrella, which as a company is profitable and whether we can accumulate that,” Trenchev said.

The consideration for Vauld Group is strategic for Nexo which wishes to expand its operations in India and other Asian markets where the former has active operations. The proposed acquisition of Vauld Group comes after Celsius Network gave Nexo a cold treatment when it offered to buy out its collateralized loan products last month.

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Tagged : Acquisition / Celsius Network / Industry / Nexo / VAULD GROUP

Nexo Hires Citigroup to Advise on Potential Acquisitions

by Blockchain NewsJune 23, 2022

Nexo, a crypto lending platform based in Switzerland, announced on Wednesday that it has tapped Citigroup to advise it on the potential acquisition of other crypto firms hit by the recent market downturn.

Antoni Trenchev, co-founder and Managing Partner of Nexo, said: “We have been approached by multiple Wall Street banks and decided to officially explore the opportunities for acquisition to help stabilize our nascent industry.”

Nexo said it hired the banking giant to explore strategic options, including a potential M&A deal within the crypto lending space.

The collaboration came as a result of a bid that saw the banker selected to serve as a financial advisor.

The partnership will enable the two firms to explore the best ways to protect retail investors in the current crypto market turbulence that exposed the cracks in the space, with several businesses staggering towards insolvency.

The lack of liquidity is on a clear display. Nexo feels having a “lender of last resort” – similar to that played by the Federal Reserve – would help crypto lenders and others in the blockchain industry.

Such “lender of last resort” would give room for solvent players to work towards mass consolidation via mergers and acquisitions (М&А), Nexo stated.

Investors Worried About Crypto Winter

The current crypto market conditions have caused lots of anxiety investors to rush for the exits while many firms feel the heat. On 13th June, prominent crypto lending firm Celsius Network froze all account withdrawals, transfers, and swap products citing “extreme market conditions.

A liquidity crisis at Celsius made investors worried about a wider contagion that could bring down other major participants in the market. Celsius was already feeling the pain after the collapse of the $60 billion stablecoin venture Terra. Celsius was an investor in Terra.

Two days later, Nexo announced plans to buyout Celsius, including assets “mostly or fully of collateralized loan receivables secured by corresponding collateral assets.”

Last week, the future of crypto hedge fund Three Arrows Capital appeared hanging in the balance as the firm faced potential insolvency after being liquidated by its lenders. The current difficult crypto market fueled the hedge fund’s plunge. The demise of Terraform Labs’ Luna token the previous month also resulted in huge losses for Three Arrows Capital, which is a huge backer of the Seoul-based crypto company.

Many other crypto firms such as Coinbase, BlockFi and Crypto.com, recently froze hiring and announced job cuts as they reckon with a dramatic downturn in the market and heightened concerns about a weakening economy.

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Tagged : Acquisitions / Citigroup / Enterprise / Nexo

Three Worst Hit Altcoins by the Current Market Onslaught: ETH, NEXO, and XMR

by Blockchain NewsJune 19, 2022

While there is a growing bullish trend in the digital currency ecosystem across the board at the time of writing, the industry is notably not exhibiting a sign of persistent health as we are unsure if we are at the bottom of the current crypto winter or not.

The combined market capitalization of the crypto industry slumped below $850 billion over the weekend as Bitcoin (BTC) tumbled to multi-year low levels. Amidst the ongoing onslaught, this piece analyzes three altcoins that are worst hit by the correcting prices. The selection is based on the top 100 coins listed on CoinMarketCap.

Ethereum (ETH)

Ethereum is the largest smart contract platform in the world, and its native token, the Ether (ETH) is down by more than 50% over the past month and by 30.27% in the past week. At a current price of $1,106.08, Ethereum is currently showing signs of recovery on the daily chart as it has parred off its losses and is up 17%.

The coin slumped to a low of $896.11 over the past weekend, its lowest level in more than 2 years. With a lot of utilities surrounding Ethereum, its demand is bound to pick up in the coming months and it has the potential to retrace its steps toward regaining its previous All-Time High (ATH) of $4,891.70.

Nexo (NEXO)

NEXO is the native token of the Swiss-based blockchain-based lending platform that offers users instant cryptocurrency-backed loans. Users deposit an accepted token – such as Bitcoin (BTC), Ether (ETH), Litecoin (LTC), or XRP (XRP) – as collateral to receive a loan in the form of a fiat currency or stablecoin.

The coin is currently changing hands at $0.6833, an 18.53% upsurge following its 34.53% drop over the past week. Nexo claims it is in a solid position to fulfill its lending obligations and even offered to buy out the collateralized loans of embattled Celsius Network this past week.

Investors may rewrite the growth path of NEXO over the coming week if its outlook stays positive.

Monero (XMR)

Monero is a privacy coin that fell remarkably over the past week per data from CoinMarketCap. The coin dropped as low as $97.23, a level that comes off as its lowest in more than 52 weeks. However, XMR is seeing a good recovery at the moment, and its investors can only hope this price will be sustained in the coming week.

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Tagged : Altcoins / Ethereum / Monero / Nexo

Nexo Launches Crypto-Backed Credit Cards in Europe in Partnership With Mastercard

by Blockchain NewsApril 14, 2022

Digital assets platform Nexo has inked a deal with Mastercard and DiPocket to launch crypto cards that will allow its customers in Europe to spend digital currencies without touching their funds.

Spending Crypto Without Depleting One’s Digital Asset’s Reserve

This is going to be made possible with the Nexo crypto card, as users will gain access to a credit line that will allow users to spend as much as 90% of the value of their crypto holdings with Nexo.

Thanks to the Mastercard partnership, which will serve as the payments infrastructure processor, Nexo Crypto Cardholders can use the card in more than 92 million merchant locations worldwide. DiPocket is the platform’s official card issuer.

“Launching the Nexo Card in Europe in partnership with Mastercard and DiPocket is a big milestone for us and the latest proof of the immense synergy between the existing financial network and digital assets,” said Antoni Trenchev, Co-founder and Managing Partner at Nexo. “This unique product will allow millions of people, first in Europe and then worldwide, to spend instantly without having to give up the potential of their cryptocurrencies, thus offering unprecedented everyday utility for the emerging asset class.”

The new card product will charge no monthly fees, no minimum repayments, or inactivity fees, and there is no foreign transaction (FX) fees for up to €20,000 per month. An additional perk attached to the new product is its 2% cashback on every transaction initiated. This cashback will be paid in BTC or the platform’s native token, NEXO.

Recanting Growth on all Sides

Nexo is undoubtedly charting an ambitious growth path in all aspects as it launched Nexo Ventures, a $150 million fund dedicated to investing in the Web3.0 space. While the capital raise is not a new affair in the growing blockchain ecosystem, the crypto card product is dubbed as the first of its kind. It repositions the platform as one of the pioneers of innovative products.

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Tagged : DIPOCKET / Industry / Mastercard / Nexo / NEXO VENTURES