Following the SEC’s charge of Blockfi failing to register its retail crypto lending product and a $100 million fine, the crypto lender Nexo has announced that it will no longer enable U.S. consumers to earn interest on new savings wallet top-ups. Nexo clients in the United States, on the other hand, will continue to earn interest on current savings wallet balances maintained ahead of the announcement.
‘Nexo Announces Huge Savings for US Customers’ according to the company
Blockfi, a crypto lending platform, was fined $100 million by the Securities and Exchange Commission. Several state regulators, including those from New Jersey, Kentucky, Texas, Alabama, and Vermont, had issued warnings to Blockfi regarding the firm’s interest-bearing accounts.
Some states issued cease and desist orders, requiring the business to halt issuing Blockfi Interest Accounts (BIAs) by a specific date. After the U.S. Securities and Exchange Commission imposed sanctions on Blockfi, the crypto lending firm Nexo declared “great savings news for U.S. consumers.”
Nexo consumers in the United States may notice some new adjustments to the Nexo interest-bearing savings program. Nexo Josh noted that the company has “voluntarily adopted improvements” to its earn interest product in the US to “comply with newly-announced recommendations.”
Non-U.S. clients, according to Nexo’s spokesperson, are “not subject to the SEC’s guidance and remain unaffected.” Existing U.S. clients will continue to receive interest on their accounts; however, Americans will not be able to earn interest on newly added amounts.
“As of today, new top-ups to your savings wallet will not earn interest until the earn
interest product is restructured,” according to Nexo Josh’s letter. “Any assets withdrawn from your savings wallet, even if returned later, will be classified as new top-ups and will not earn you interest,” the spokesman added.
Nexo Cryptocurrency Lender is Getting Ready to Launch Earn Interest Product 2.0
They earn interest products will not be available to new Nexo clients in the United States in its current form. It intends to revamp the product and present it as the Earn Interest 2.0 edition.
Nexo’s Josh continued, “Our team and legal advisers are working around the clock to devise solutions for our US clients that will make them earn interest product 2.0 as broadly accessible as possible while remaining compliant with the new regulatory reality.”
Meanwhile, Kentucky and Alabama issued warnings to the crypto lending company Celsius over interest-bearing accounts, making Blockfi not the only crypto firm probed by securities regulators in the United States. According to the SEC’s current position, crypto savings products that pay interest “are not as safe as traditional savings accounts.”
