Crypto lender Nexo has issued a press release relating to the enforcement actions it’s dealing with from eight completely different states pertaining to its Earn Curiosity Product (EIP).
Earlier this week, state regulators in California, New York, Washington, Kentucky, Vermont, South Carolina, Maryland and Oklahoma made allegations that Nexo was violating securities legal guidelines with EIP.
In a brand new weblog put up, Nexo says it has at all times aimed to be a sustainable and compliant enterprise.
“We now have been working with US federal and state regulators and perceive their urge, given the present market turmoil and bankruptcies of corporations providing comparable merchandise, to satisfy their mandates of investor safety by analyzing previous conduct of suppliers of earn curiosity merchandise.”
The agency says it not accommodates new US accounts and balances for EIP for the reason that U.S. Securities and Alternate Fee (SEC) made its stance on crypto lending platforms’ interest-bearing accounts.
“Because the SEC steerage on earn merchandise, dubbed ‘The BlockFi Order’ in February 2022, Nexo has voluntarily ceased the onboarding of latest US purchasers for our Earn Curiosity Product in addition to stopped the product for brand spanking new balances for present purchasers.”
The agency additionally responds to criticisms that it could offer unrealistically excessive rates of interest for its purchasers. Nexo clarifies that it solely presents 36% curiosity on Axie Infinity (AXS), which at the moment has a 60% staking reward, however provides decrease, single-digit curiosity for nearly all of the others.
“Our charges for the overwhelming majority of the property are within the single-digit percentages. With regards to the preferred property, together with Bitcoin, Ethereum, and stablecoins, we provide steadiness limits, the place clients earn a decrease yield above sure quantities.
Our charges are at all times decided with the underlying sustainability of our enterprise and safety of buyer property in thoughts. An outline of the newest adjustments to our Earn Curiosity Product is out there right here the place it’s proven that rates of interest for Bitcoin, for instance, are nominal and differ between 1.5% and seven%.
We do pay rates of interest as excessive as 36% for one asset solely, Axie Infinity’s AXS the place the present staking reward is sort of 60%. This price, nevertheless, is an exception, and we don’t promote the proportion in our advertising supplies.”
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