Daniel Jones
In order to assure compliance, Kalin Metodiev emphasized that Nexo has been negotiating with regulators for the past five years. He expressed astonishment that this information was only recently “found.”
Nexo’s co-founder and managing partner Kalin Metodiev expressed surprise on behalf of his company at the public action taken by eight state regulators for securities violations.
The California Department of Financial Protection and Innovation (DFPI) allegedly accused Nexo of supplying a security product that has not been authorized for sale by the government and issued a waiver and avoidance order against Nexo’s Interest Earnings Product earlier this week. investment agreement
The DFPI also stated that it has teamed up with regulators from seven additional states, including Kentucky, New York, Maryland, Oklahoma, South Carolina, Washington, and Vermont, to pursue action against the corporation.
Metodiev revealed to Cointelegraph at Token2049 that Nexo had been surprised by the most recent regulatory crackdown and was “trying to be accountable” for this by having direct conversations with regulators like the Securities and Exchange Commission (SEC). a long time.
Because the process has been ongoing for some time, he said, “We were a little astonished when this news was made public.”
According to Metodiev, Nexo earlier this year informed the SEC that it “voluntarily” suspended services for new US consumers and that the company is acting in good faith and wants to abide by local laws.
Since February 19, no new customers in the US have been able to access the product, and those who already have an account there cannot add more money to it.
“The SEC’s ruling against BlockFi in February was the actual incident that prompted us to make our choice. We stopped immediately after realizing that we had contacted the SEC and freely disclosed that we had been receiving payments from US consumers. Additionally, we do not actively seek out new clients for our appealing product.
In the end, Nexo decided to serve in the US despite everything. The company will, meanwhile, continue to talk with regulators about its crypto services.
Metodiev also mentioned that Nexo is investing in Hulett Bancorp, a holding company that holds Summit National Bank, a bank with federal charter status, and that the company is considering more avenues for US expansion.
Nexo has also looked to acquire a cryptocurrency business, the company has been in talks with numerous businesses that have had liquidity issues in the bear market, including Voyager Digital and Celsius.
They claimed that discussions with other businesses were progressing well, but he provided no specifics regarding any potential deals. According to Metodiev, FTX was priced out of a Voyager deal because Nexo couldn’t afford the $1.4 billion asset valuation it purchased.
As I previously indicated, if the opportunity becomes too lucrative for us, risk management takes over and we declare that we are “not even sure we can break that.” While helping individuals and the platform is something we want to do, it also needs to be a regular business consideration for us.