(Bloomberg) — Crypto platform Nexo appears to be changing the terms for U.S. customers to a product that offers the ability to earn high interest rates on crypto deposits. The decision follows the U.S. Securities and Exchange Commission’s recent settlement with BlockFi Inc. over a similar product.
In a statement posted to its official subreddit Friday by a moderator who isn’t an employee with the company but says he works “closely” with them, Nexo said the changes are an effort to voluntarily comply in light of BlockFi’s agreement to pay $100 million to federal and state securities regulators to settle allegations that it illegally offered a product that pays customers high rates to lend out their digital tokens.
BlockFi is now planning to register its offerings with the regulator — a path that Nexo on the subreddit platform said it also intends to follow. Nexo’s current U.S. customers won’t be able to earn interest on new deposits, though they’ll be able to continue earning on existing digital-asset balances, the statement said. New clients won’t be able to access the product at all.
The firm said it eventually intends to make a new offering available that is compliant with the securities laws. The recently announced changes will be in place “until the restructuring of the Earn Interest Product and the registration process with the relevant regulatory bodies are finalized,” according to the statement. Nexo didn’t immediately return a request for comment.
Nexo on its website touts its interest-bearing product as offering up to 20% in annual interest for investors. The firm said non-U.S. clients will remain unaffected by the recent updates.
Bloomberg reported in January that SEC is scrutinizing Celsius Network, Gemini Trust Co., and Voyager Digital Ltd. over issues similar to the ones raised in the BlockFi settlement.
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