Cryptocurrency lending platform has had a bad start to the new year. In the latest, it has agreed to pay $45 million to settle charges brought by the United States SEC and state regulators.
The US regulators have charged Nexo with offering and selling a retail crypto lending product, the Earn Interest Product (EIP), without getting them properly registered.
“The order finds that the EIP is a security and that the offer and sale of the EIP did not qualify for an exemption from SEC registration. Therefore, Nexo was required to register its offer and sale of the EIP, which it failed to do,” SEC said in a statement.
Early this month, Nexo’s offices in Bulgaria were raided by the local authorities for suspected money laundering activities. A spokesperson for Bulgaria’s Attorney General the company is being investigated for money laundering, tax fraud, and crime associated with banking services.
“Bulgarian prosecutors allege that $94 billion (€86 billion) have gone through the Nexo platform in the past five years and that one person has financed terrorist activities through the platform,” Euronews reported.
Local Nexo officials dismissed the charges saying its offices in Bulgaria don’t have any consumer interface. They offer back-office support to Nexo’s global operations.
The matter soon took a political color with rival parties in parliament accusing each other of receiving donations from Nexo. Former Bulgarian Prime Minister Boiko Borisov from the GERB party accused five Nexo employees of donating 20,000 BGN each to rival Democratic Bulgaria in October 2021.
