On Dec 5,Ā crypto lender Nexo announced that it would discontinue operations in the United States within the next few months. The company specifically mentioned that it would immediately cut off access to its āEarn Interest Productā in eight U.S. states and is no longer allowing new registrations for its Earn product.
Regulator Discussion Hits Dead End
According to Nexoās officialĀ announcement, the firm had earlier off-boarded Earn clients from New York and Vermont at the regulatorās insistence. The announcement further goes on to state,
āOur decision comes after more than 18 months of good-faith dialogue with US state and federal regulators which has come to a dead endā
Additionally, the firm cites that their Earn Interest Product will no longer be available fromĀ December 6, 2022, for existing clients in eight additionalĀ U.S. statesĀ ā Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, California, and Washington.
Is The FTX Collapse To Blame?
As per Nexo, it faced a lot of grievances with the U.S. regulators, claiming that even though regulators initially encouraged their cooperation and a path towards sustainability did look viable ā the recentĀ FTX saga has made it āimpossibleā for the company to continue its operations.
Read More:Ā FTX Fraud To Land SBF In Jail Soon?
āGiven the challenges of the confusing and contradictory US regulatory regime, it is with a heavy heart that we begin the gradual and orderly departure from the US.ā, the announcement said.
Nexoās Troubled U.S. Tenure
Earlier, according to the California Department of Financial Protection and Innovation, Nexoās interest-earning accounts offeredĀ interest ratesĀ of up to 36% annually. Nexo later claimed that the 36% interest rate only applied to one asset and that the high rate was not advertised.
Read More:Ā Crypto Giant Nexo In Trouble Over An Old Lawsuit
Although the crypto lender did not provide a firm timeline for its overall withdrawal from the U.S., Nexo said it will continue to process customer withdrawals āin real-timeā as it gradually shuts down its operations in the country.