January 30, 2023

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Nexo

Nexo is discontinuing services in the US

Source: AdobeStock / Patrick Daxenbichler

Nexo, a major crypto lending company, has decided to leave the US. Implementation of the project will take several months. The move was prompted after Nexo failed to reach an agreement with the US on terms.

For example, Nexo announced on Monday that it will slowly and gradually phase out services and products in the US over the coming months.

They attribute this to the inconsistent and changing nature of federal regulators. Nexo indicates that it has tried to adapt their business operations, but considers that this is no longer possible. The general statement is as follows:

“Our decision comes after more than 18 months of good-faith dialogue with U.S. state and federal regulators, which has reached an impasse.”

As a direct result, Nexo’s gravity interest product will no longer be available to customers in eight states, including Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, California and Washington.

In the meantime and until further notice, Nexo notes that customers outside of the above locations will continue to have access to Nexo’s products.

The company says the US is more talk than action when it comes to crypto regulations. Also, the US may not have crypto users’ best interests at heart.

Nexo said:

“It is now unfortunately clear to us that, despite rhetoric to the contrary, the United States refuses to provide a path forward for enabling blockchain businesses, and we cannot trust our customers that regulators are looking out for their interests.”

The company added that the payment specialist has been informed of the decision and they will continue to issue refunds to ensure customers can access their assets.

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Controllers create an environment in which they cannot function efficiently

According to Nexo, regulators will initially encourage cooperation. So a solution appeared in sight. However, more recent events have shown a change in behavior among regulators, with the reverse being true.

The biggest challenges in their discussions with Nexo regulators:

  • Earlier in the day: Eliminating regulatory concerns for products available in the US.
  • Future: Finding a way to start production of the Nexo in the US within the framework of all the restrictions.

Nexo has also provided a comprehensive list of measures taken by the US in response to the changing regulations. This includes the following:

  • Registration of Token Sale with US Securities and Exchange Commission (SEC) in 2018.
  • In light of the lawsuit between Ripple and the SEC, Ripple (XRP) is disabling exchange capabilities.
  • Stop signups for interest earning product from all US customers.
  • All customers from the states of New York and Vermont have been terminated.

After all the above points, Nexo said the following:

“We’ve reached a point where regulators don’t want to coordinate with each other and have to take positions that contradict each other, creating an environment where it’s impossible to operate efficiently and create the expected value for our customers.”

For Nexo, the straw that broke the camel’s back was the Consumer Financial Protection Bureau’s (CFPB) decision. It says it is authorized to investigate the current case instead of the SEC and the US government.

Nexo also had to deal with several state securities regulators who decided to sue Nexo without any prior reason while they had been working quietly for months.

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For example, Nexo was issued a cease-and-desist order in late September by California’s Department of Financial Protection and Innovation (DFPI), which it said was offering and selling “ineligible securities” through the Nexo program. This would violate the California Cooperative Code.

According to Reuters, eight US state regulators have sued Nexo for failing to register their leveraged interest product. With that product you can Make money with crypto By pinning some coins.

After this news, the price of NEXO, the native token of the Nexo platform, fell by 5.7% in a day. At the time of writing, the price is at 0.658, indicating that the price has fallen 35% over the past month. Last year, 71% less.

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