Crypto lender Nexo Capital Inc. agreed to pay $45 million to settle claims that its product violated investor-protection laws, becoming the second digital-asset lender in a week to face a major enforcement action, the Wall Street Journal reported. The Securities and Exchange Commission said Nexo’s Earn Interest Product was the type of investment that should have been registered with regulators before being sold to the public. Crypto middlemen such as Nexo recruited huge numbers of customers over the past several years by offering interest rates in excess of 10% to people who would loan out their crypto. Nexo settled the SEC’s investigation without admitting or denying wrongdoing, and agreed to pay half of the $45 million fine to the federal agency and half to a group of states that had already sued it. The SEC last week sued crypto lender Genesis Global Capital LLC, alleging its crypto-lending program is a security that should have followed federal rules. Nexo agreed with the SEC to stop offering the program to American investors, and had already decided in December to start phasing it out in the U.S., the SEC said. A group of states including California and New York sued Nexo in September over the same claims the SEC alleged on Thursday. The company settled with 17 states on Thursday, according to the North American Securities Administrators Association.
