Nexo Crypto Lending Platform To Cease US Operations

Lending platforms have struggled to achieve regulatory clarity in the US, and Nexo has had enough

article-image

Karnoff/Shutterstock.com

share

Nexo, a digital assets platform which offers lending services and an exchange, said it will gradually phase out US operations as a direct result of a “dead end” in its attempts to gain clarity from US regulators.

In a statement, Nexo claimed it had engaged in “more than 18 months of good-faith dialogue with US state and federal regulators” — but, despite “rhetoric to the contrary,” it could not reassure customers that “regulators are focused on their best interests.”

Starting Tuesday, the company added, its flagship interest-bearing investment products will no longer be available to existing clients in eight more states: Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, California and Washington. The yield-bearing offering had already ceased operations in New York and Vermont.

Lending platforms in the US have been under scrutiny by state regulators, especially following the collapse of Celsius and Voyager. When Coinbase attempted to launch a lending program in 2021, the SEC issued a Wells notice — which informs the recipient that it intends to sue in court. Coinbase subsequently abandoned the Lend effort, with a terse note explaining the SEC decision: “We don’t know why.”

Nexo noted in its update that it took a variety of actions over the last couple of years to attempt to stay in compliance with US regulations, including registering its token sale with the SEC, exiting New York markets, and refusing new funds from US customers into its Earn Interest product when BlockFi — another crypto lender that recently sought bankruptcy protection — was ordered to undertake similar action, in February 2022.

Multiple crypto companies and mainstream finance stalwarts have expressed their frustration that US regulations remain unclear. At Money20/20 in October 2022 , May Zabaneh — the VP of PayPal’s blockchain and cryptocurrency division — said that “There has to be some clarity that comes out, some standards, some ideas of the dos and the don’ts and some structure around it… otherwise that mainstream adoption will really be inhibited.”

Brad Garlinghouse of Ripple told CNBC last year that although in “markets like Singapore and even parts of Korea where there really has been a thoughtful government-led effort to define and have clear regulatory frameworks around cryptocurrencies… Ironically, here in the United States they have not provided that same clarity.”

Paul Grewal, the Chief Legal Officer at Coinbase, explained in a blog post referencing their doomed Lend product that “After our initial meeting, we answered all of the SEC’s questions in writing and then again in person. But we didn’t get much of a response. The SEC told us they consider Lend to involve a security, but wouldn’t say why or how they’d reached that conclusion.”

Blockworks has reached out to Nexo for comment.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

The convergence of DePIN and energy generation aims to address modern grid challenges by incentivizing distributed generation.

article-image

While Arizona’s governor could veto another crypto reserve bill, similar North Carolina and Texas laws are approaching the finish line

article-image

However, they noted there’s now an increased risk that unemployment and inflation will rise in the coming months. 

article-image

The network’s most ambitious upgrade since the Merge brings validator streamlining, smart account UX and doubled blobspace to Ethereum

article-image

Debate over extra Bitcoin use cases has returned, two years on from Ordinals

article-image

Altcoin season may be on a permanent pause as the market matures and paths grow more selective