The USA's Security and Exchange Commission commenced civil enforcement proceedings against Nexo Capital Inc, part of the Nexo group that operates the tag line "Disrupting the financial system, one bit at a time." The SEC alleged that Nexo did not register the offer and sale of its retail crypto asset lending product, the Earn Interest Product. Under the agreement, entered into on 19th January, 2023, Nexo will pay a penalty of USD22.5 million and to cease its unregistered offer and sale of the Earn Interest Product to U.S. investors. 

Nexo also settled actions brought by several state regulators and agreed to pay a further USD22.5 million. In a statement, the SEC said "According to the SEC’s order, in or around June 2020, Nexo began to offer and sell the Earn Interest Product in the United States. The Earn Interest Product allowed U.S. investors to tender their crypto assets to Nexo in exchange for Nexo’s promise to pay interest. The order states that Nexo marketed the Earn Interest Product as a means for investors to earn interest on their crypto assets and Nexo exercised its discretion to use investors’ crypto assets in various ways to generate income for its own business and to fund interest payments to Earn Interest Product investors. The order [includes a finding] that the Earn Interest Product is a security and that the offer and sale of the Earn Interest Product did not qualify for an exemption from SEC registration. Therefore, Nexo was required to register its offer and sale of the Earn Interest Product, which it failed to do." 

The SEC says that the company acted promptly when the SEC issued proceedings and settled them with BlockFi in February, 2022 by immediately ceasing its sale of the Earn Interest Product which was similar to BlockFi Interest Accounts. The action against BlockFi was the first of its kind and defined the SEC's policy. Nexo has since followed a process to wind down existing accounts. 

Nexo's entire settlement was with a who's who of US regulators: the U.S. Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), consisting of all 50 U.S. States and three territories, the Attorney General of New York, the Texas Department of Banking, the Washington Consumers' Services Division and the Alaska Division of Banking and Securities. 

As is usual in such settlements, Nexo did not admit or deny any of the allegations. In a statement, Nexo said "This closes all multi-year-long inquiries into Nexo, looking at various aspects of the business, following the company’s voluntary decision to stop offering its EIP in the U.S., Nexo’s proactive exit from the U.S. market in an orderly fashion, and an agreement to pay a monetary penalty, payable over a 12-month period. The U.S. Federal Regulators do not contend that Nexo engaged in any fraud, or misleading business practices or that any Nexo customers have been harmed or misled about Nexo’s financial health." 

Nexo continues to offer crypto-backed loans and interest bearing accounts where it is authorised to do so.