BISMARCK โ The state of North Dakota has reached a settlement agreement with a cryptocurrency platform related to the sale of unregistered securities, the state Department of Securities announced Monday, February 6.
Cryptocurrency platform Nexo Capital Inc. sold earned interest product (EIP) accounts to more than 93,000 investors in the US, for a total of more than $800 million, according to the Securities Department.
Nexo, a Cayman Islands corporation formed in 2018, provides virtual currency-related financial services to retail and institutional clients and investors in the US, including trading, lending and lending services.
"During the investigation, it was discovered that EIP investors were able to passively earn interest on digital assets by lending those assets to Nexo. Nexo maintained full discretion over income-generating activities used to earn profit for investors," the Department of Investigation said. Values โโin a statement. . "The company offered and promoted the EIP and other products to investors in the US through its website and social media channels, suggesting in some cases that investors could earn returns of up to 36%" .
Nexo allegedly failed to comply with state securities registration requirements, and as a result, investors were sold unregistered securities and were not provided with information necessary to understand potential risks, according to the Securities Department.
A multi-jurisdictional working group reached a $22.5 million settlement with Nexo on behalf of 53 US jurisdictions. Under the settlement, Nexo agreed to investor protection procedures, the Securities Department said. The US Securities and Exchange Commission settled separately with Nexo for the same amount of money.
Nexo will pay a penalty of $424,528.30 to states that are part of the agreement, including North Dakota, according to the Securities and Exchange Department.
