By Michael Scott
Nexo, a crypto lending platform, announced its US exit citing the absence of regulatory clarity. Nexo’s official communication on December 5 indicated the crypto borrowing platform would gradually cease US operations.
The announcement conveyed via Nexo blog post admitted the decision to phase out US operations was regrettable. Nevertheless, it considered the exit necessary, citing an 18-months conversation to ensure compliance with the financial laws.
Reasons for Ceasing US Operations
Nexo considers the US regulators have portrayed inconsistent and changing positions during the dialogue held in the past 18 months. Despite the inconsistent conduct by the US officials, Nexo committed to engaging in proactive modification to resolve the concerns emerging in the conversation.
A Nexo representative confessed that the talks failed to yield agreement with the US officials. The representative pointed out that the good-faith dialogue with the federal and state regulators revealed the refusal by the US to offer a facilitative path for blockchain businesses.
Nexo revealed that the US acted against the rhetoric of enabling blockchain innovations in the country. This consideration prompted Nexo to admit its inability to guarantee customers that the US regulators prioritize their interests.
Plans for Gradual Exit
A subsequent communication relayed via official Twitter hurdle disclosed that Nexo started off-boarding customers in Vermont and New York states. Besides, it announced freezing registrations for its Earn Interest product, barring US citizens.
The Twitter thread indicated that the Earn Interest Product would become inaccessible on December 6 to the existing customers drawn from Indiana, Oklahoma, California, Maryland, Kentucky, Washington, South Carolina, and Wisconsin. Nexo’s statement indicated that existing customers from other states would access Earn Interest Products.
Criticism of US Regulators
The announcement of Nexo’s imminent exit coincides with the criticism of US regulators for seeking expansive oversight powers in monitoring crypto exchanges. The crypto industry executives consider the increased appetite for regulatory-backed monitoring arises from the sudden FTX Group downfall.
In addition, executives in the crypto industry consider that overregulating the US space is compelling investors to commit their wealth to risky offshore exchanges.