From 1 April 2023, the crypto lending platform Nexo will discontinue the Earn Interest Product (EIP) offering to U.S. investors.
An update for our U.S. clients.https://t.co/wRiDOPKEqg
— Nexo (@Nexo) February 11, 2023
“We ask you to begin planning withdrawals of your funds by that date,” the blog says.
Until the product closes, customers will continue to earn interest on their balances, the company said. The restrictions do not apply to users outside the United States or to non-residents of the country.
Other Nexo services will not be affected. The company urged account holders who are mistakenly flagged as U.S. residents to update their information and provide a bank statement, a utility bill, the latest tax return, or a valid lease agreement.
“The action plan reflects our belief that developing clear regulatory frameworks is the best way to protect the crypto industry and to bring it safely into the mainstream in compliance with the rules,” the platform’s representatives said.
In September 2022, the U.S. Securities and Exchange Commission (SEC), as well as overseeing authorities of several states, deemed EIP to be securities.
Earlier in 2023, Nexo reached settlements with regulators and agreed to pay $45 million in fines.
Earlier, similar charges by the SEC settled with BlockFi. In its case the amount of the penalty was $100 million. The crypto-lending platform agreed not to provide U.S. residents with services related to savings accounts BIA.
Earlier in February, Kraken, the bitcoin exchange, agreed to shut down its staking program for American users and to pay $30 million in fines.
SEC Chair Gary Gensler urged the crypto industry to take note of the platform’s decision and to strive to ensure compliance with the applicable rules.