On December 5, 2022, NEXO announced that it would be gradually leaving the United States. They also provided a thorough justification for their decision, along with other contributing causes.
Today we are announcing the regrettable but necessary decision that Nexo will be phasing out its products and services in the United States due to a lack of regulatory clarity. 🧵
— Nexo (@Nexo) December 5, 2022
This earned a lot of attention and comments, the majority of which were not in support of the United States’ regulatory members’ course of action.
Nexo, knowing fully well that they’ll lose market share, still had to leave New York at the request of the New York state’s attorney general, even though some of its rivals are rumored to be providing interest-bearing cryptocurrency products there. This same event occurred in Vermont. Nexo has now declared its gradual exit, that they’ll be phasing out from the United States.
The US regulators have refused to discuss rules with Nexo despite it being one of the few digital asset corporations that filed the sale of their token with the US Securities and Exchange Commission (SEC), which happened in 2018. Nexo stated that they had discussions with the U.S. regulators for over 18 months, but there were no positive outcomes. Are the US regulators being fair with their actions?
We may be reminded of the bankruptcy of certain centralized lending platforms, such as Celsius and BlockFi. The collapse of centralized finance platforms like Celsius, Voyager, and BlockFi, which were reportedly on the verge of extinction, can be connected to current events. Customers are finding it more challenging to trust centralized financial lending platforms again as a result of the collapse of so many of them.
Celsius was accused in court of exploiting customer cash for highly speculative transactions, and as a result of Terra’s failure (which led to the demise of “Three Arrows Capital” and BlockFi), they also declared bankruptcy. Due to their substantial bitcoin loan to Three Arrows Capital, BlockFi was impacted.
Nexo has guaranteed that these immediate modifications will only have an impact on how usable the Earn Interest Product is for those who live in the eight states that are listed below. These customers will continue to have access to all other Nexo products offered in these regions in the meantime and until subsequent notice. People’s ability to access their funds and make withdrawals has been prioritized. In addition to New York and Vermont, the company asserts that as of December 6, 2022, a further list of eight states won’t be able to use Nexo’s Earn Interest Product. They are Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, California, and Washington, as well as Indiana, Kentucky, and Oklahoma.
