Crypto lender Nexo to stop paying interest on new deposits from US customers
Nexo announced a set of policy changes for US customers, a move that comes as the Securities and Exchange Commission scrutinizes products and services in the crypto lending sector.
Per an email sent to customers and a statement on Nexo’s official subreddit, the policy changes affect both existing accounts as well as new ones, with the firm saying it “voluntarily implemented changes to its Earn Interest Product in the U.S. to comply with newly-announced guidance.”
“Nexo’s registered clients who are currently earning interest on the platform will continue to do so on their existing digital asset balances only,” the firm said, explaining:
“Top-ups to your Nexo Wallets made after today will not earn interest until the restructuring of the Earn Interest Product and the registration process with the relevant regulatory bodies are complete, as per the recently received guidance. Once complete, all new accounts will be transferred to the Earn Interest Product 2.0 and the new top-ups will earn interest. Please note that if you withdraw any of the assets in your current balance, you won’t be able to earn interest on them even upon their subsequent return.”
For new accounts, “Nexo’s Earn Interest Product in its current form will not be available for new clients, until the restructuring of the Earn Interest Product and the registration process with the relevant regulatory bodies are finalized, as per the recently received guidance.”
“The current changes only affect Nexo’s Earn Interest Product in the U.S. and have no impact on any other Nexo products,” the statement continued. “Non-U.S. clients are are not subject to the SEC’s guidance and remain unaffected by any of these changes.”
The timing is notable given the SEC’s evolving oversight of the crypto lending space. Earlier this week, crypto lender BlockFi settled with the SEC and state securities regulators to the tune of $100 million. The firm also plans to register its BlockFi Yield product as a security.
SEC chair Gary Gensler has highlighted the crypto lending sector one area in which federal officials are scrutinizing.
In October, Nexo appeared to have been the subject of scrutiny in the US state of New York, along with crypto lending firm Celsius, according to unredacted letters that became available at the time.