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Eight states in America with charges against Nexo over interest-bearing accounts

Eight US states are suing Bulgarian crypto company Nexo for unlicensed securities sales and misleading marketing, according to a Twitter post by New York Attorney General Letisha James. This is reported by The Verde. Several other states — California, Kentucky, Maryland, Oklahoma, South Carolina, Washington and Vermont — are joining the legal dispute — also filing “administrative actions” against the company, according to a press release from the New York AG.

In our country, the platform is business news Inevstor also announced the information that 8 American states announced on Monday that actions had been initiated against the Nexo Group crypto platform in connection with unregistered crypto products, citing CNBC.

State regulators in California, Kentucky, New York, Maryland, Oklahoma, South Carolina, Washington and Vermont accuse Nexo of offering interest-bearing accounts to customers that were not previously registered as securities and did not provide the necessary information about them . Without the necessary financial disclosures, according to state regulators, investors cannot make informed investment decisions.

The allegations also state that Nexo misrepresented the profiles.

In a comment to Investor.bg, Nexo, which was established in Bulgaria, stated that the company works with the federal and state regulators of the USA.

The platform stated that in connection with the US federal Securities and Exchange Commission (SEC) guidance on interest products called “The BlockFi Order”, in February 2022, Nexo voluntarily stopped onboarding new US customers for its interest product , as well as stopped offering it for new balances to existing customers.

Nexo is also “committed to finding a clear path forward for the regulated provision of products and services in the US, ideally at the federal level.” The company also emphasizes that it does not engage in unsecured loans, has no exposure to the LUNA/UST tokens that caused the crisis in the crypto market, has not been bailed out by a third party and has not resorted to withdrawal restrictions while negotiating the purchase of other companies.

Quoted by CNBC, the company said only one of its assets offered interest of 36%, and this rate was not advertised in marketing materials. Nexo also points out that some of its most popular assets, including Bitcoin, are yielding in the single-digit percentage range.

The action against Nexo comes amid a recent spate of bankruptcies in the sector that have left a number of investors without access to their funds. Celsius, which offered products with similar returns, filed for bankruptcy this summer after freezing its users’ accounts in June. Voyager filed for Chapter 11 bankruptcy in July. The situation in the sector was also worsened by the collapse of the cryptocurrency Terra USD and the crisis with the hedge fund Three Arrows Capital.

According to the lawsuit filed by Vermont authorities, “the investors have no involvement in the selection, monitoring or review of the revenue-generating activities that the defendants use to earn this interest.”

The text makes it clear that as of July 31, 2022, more than 93,318 users located in the United States have invested more than $800 million in these company accounts.

New York Attorney General Leticia James filed a lawsuit against the platform after more than 10,000 residents of the state were affected.

“Nexo violated the law and investor confidence by falsely claiming to be a licensed and registered platform,” James said, quoted by Reuters. It also states that any proceeds from the company’s “illegal activity” will be requested to be returned.

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