Ohio is cracking down on the crypto industry with a massive $22.5 million settlement with Cayman Islands-based lender Nexo announced Tuesday by the North American Securities Administrators Association and the U.S. Securities Exchange Commission (SEC).
The Ohio Division of Securities found that Nexo's Earn Interest Product (EIP) failed to comply with state securities registration requirements and deprived investors of vital information needed to make an informed decision to invest.
"All financial services companies, including those offering services for crypto assets, must comply with Ohio’s securities laws," said Securities Commissioner Andrea Seidt.
In addition to Ohio, the settlement involves other U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Nexo owes state regulators and the SEC $45 million, which includes an agreement to cease offering the EIP in Ohio.
The crackdown on Nexo serves as an alert to other crypto companies that they must follow the same regulations and requirements of traditional financial services companies to ensure the safety of investors' funds.
Key Points
- Ohio has joined a $22.5 million settlement with crypto lender Nexo.
- The settlement involves other U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
- Nexo was found to have failed to comply with securities registration requirements.
- Nexo will pay a total of $45 million and cease offering the EIP in Ohio.
TL;DR
Ohio regulators have joined a multi-state settlement against crypto-lending company Nexo to the tune of $45 million to ensure investor safety. The settlement emphasizes the importance of crypto companies following the same regulatory requirements as traditional financial services.