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Thursday, June 1, 2023

Crypto Lender Nexo Terminates Interest Payments on New Deposits From US Clients

Crypto Lender Nexo Terminates Interest Payments on New Deposits From US Clients – Nexo, the crypto lender, has announced that it will no longer allow U.S. clients to earn interest on new savings wallet top-ups, following a $100 million fine by the Securities and Exchange Commission (SEC) for Blockfi failing to register its retail crypto lending product. On the other hand, Nexo customers in the United States will continue to get interest on current savings wallet balances maintained prior to the announcement.

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The Securities and Exchange Commission (SEC) penalized Blockfi, a crypto lending company, $100 million last week. Blockfi had received warnings from state regulators in New Jersey, Kentucky, Texas, Alabama, and Vermont over the firm’s interest-bearing accounts.

Some states issued cease and desist orders, which required the company to stop issuing Blockfi Interest Accounts (BIAs) by a certain date. After the U.S. Securities and Exchange Commission imposed sanctions on Blockfi, the crypto lending firm Nexo declared “big savings news for U.S. consumers.”

Also Read: Fed Bans Senior Officials From Cryptocurrency Investing

Nexo Josh, the moderator of the r/nexo subreddit on Reddit, believes that Nexo clients in the United States will notice some changes to the Nexo interest-bearing savings program. Nexo Josh added that the company has “voluntary adopted improvements” to it earn interest product in the US to “comply with newly-announced recommendations.”

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According to a Nexo representative, non-U.S. clients are “not subject to the SEC’s recommendations and remain unaffected.” Existing U.S. clients will continue to get interest on their accounts; however, on newly added balances, Americans will not be able to earn interest.

New top-ups to your Nexo savings wallet will not earn interest as of today, according to Nexo Josh’s statement, until the earn interest product is reformed. “Any assets withdrawn from your savings wallet, even if returned later,” the person continued, “will be classified as new top-ups and will not earn you interest.”

Also Read: US Lawmaker Introduces Bill to Protect Privacy in Cryptocurrency Transactions

The earn interest product would not be available to new Nexo clients in the United States in its current form. Nexo aims to update the product and rebrand it as Earn Interest 2.0. “Our team and legal advisers are working around the clock to create solutions for our US clients which will make the earn interest product 2.0 as widely available as possible while keeping compliant with the new regulatory realities,” Nexo Josh stated.

Meanwhile, securities regulators in Kentucky and Alabama have issued warnings to Celsius, a crypto lending company, over interest-bearing accounts, making Blockfi far from the only crypto company under investigation. According to its present position, the SEC considers that crypto savings products that pay interest “are not as safe as bank or credit union accounts.”

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