Following the U.S. Securities and Exchange Commission (SEC) charging the crypto lending platform Blockfi with failing to register its retail crypto lending product and fining the firm $100 million, the crypto lender Nexo has announced it will no longer allow U.S. citizens to earn interest on new savings wallet top-ups. However, Nexo customers from the U.S. will continue to earn interest on their current savings wallet balances held prior to the announcement.
Nexo ‘Reveals Big Savings News for US Customers’
Last week, the SEC cracked down on the crypto lending platform Blockfi and the company was fined $100 million in penalties. The news followed several regulators from a myriad of states like New Jersey, Kentucky, Texas, Alabama, and Vermont giving warnings to Blockfi about the firm’s interest-bearing accounts.
Some states issued cease and desist orders and the company had to stop offering Blockfi Interest Accounts (BIAs) by a certain date. After Blockfi’s penalties were handed down by the U.S. securities regulator, the crypto lending firm Nexo has announced: “big savings news for U.S. customers.”
According to the Reddit moderator of the subreddit r/nexo, Nexo Josh, U.S.-based Nexo customers will be seeing some new changes in regard to the Nexo savings program that bears interest. Nexo Josh explained that the company has “voluntarily implemented changes” to its earn interest product in the United States in order to “comply with newly-announced guidance.”
Nexo’s representative noted that non-U.S. clients are “not subject to the SEC’s guidance and remain unaffected.” Existing U.S. clients will keep earning on the balances they hold, however, Americans cannot earn interest on newly added balances.
“New top-ups to your [Nexo] savings wallet, as of today, will not earn interest until the restructuring of the earn interest product,” the message from Nexo Josh said. Furthermore, the representative stressed that “any assets withdrawn from your savings wallet, even if returned later, will be treated as new top-ups and will not earn you interest.”
Crypto Lender Nexo Hopes to Launch Earn Interest Product 2.0
As far as new U.S.-based Nexo clients are concerned, the earn interest product will not exist in its current form. Nexo plans to restructure the product and it will be introduced as the earn interest product 2.0 version. “Our team and legal advisers are working around the clock to develop solutions for our U.S. clients that will make the earn interest product 2.0 as widely accessible as possible and compliant with the new regulatory realities,” Nexo Josh concluded.
Meanwhile, Blockfi wasn’t the only crypto firm targeted by securities regulators in the U.S., as Kentucky and Alabama sent warnings to the crypto lending company Celsius over interest-bearing accounts. According to the SEC’s current opinion, the U.S. regulator says crypto savings products that offer interest “are not as safe as bank or credit union deposits.”
What do you think about Nexo voluntarily implementing changes toward its interest-bearing account products in order to comply with U.S. regulators? Let us know what you think about this subject in the comments section below.