After BlockFi’s $100 million settlement with the US securities regulator, its competitor in the crypto lending market, Nexo, changed the terms for its US customers for its interest-bearing crypto products.
“Nexo has voluntarily implemented changes to its Earn Interest Product in the U.S. to comply with newly-announced guidance,” a moderator of the official subreddit of Nexo posted on Friday.
As per the new changes, Nexo customers of the US will continue to earn interest on the existing savings wallet balances, but they will not receive any interest on new top-ups to their savings wallet.
“New top-ups to your Savings Wallet as of today will not earn interest until the restructuring of the Earn Interest Product and the registration process with the relevant regulatory bodies are finalized, as per the recently announced guidance,” the moderator added.
However, the changes are only applicable to the company’s clients in the United States. It has assured that non-US clients will continue to receive interest on their crypto deposits as per the existing terms for them.
Regulators vs Crypto Lenders
Nexo is one of the many cryptocurrency platforms that are offering interest to their customers on crypto deposits. These services are similar to that of traditional banks, the only difference is the interest offered by these crypto platforms is significantly higher. These companies can provide high interest as there is massive demand for crypto borrowings among institutions.
However, the US regulators, both federal and state, believe that these crypto interest accounts are violating the existing securities market law. Many state regulators have opened investigations against crypto lenders and even slapped cease-and-desist orders on many platforms. Moreover, the SEC has opened a probe against multiple platforms.
But, the industry came into the limelight after the recent settlement of BlockFi with the SEC and other state regulators, paying a total of $100 million. Furthermore, the platform agreed to stop offering interest-bearing crypto accounts in the US.
