Oregon will receive nearly $425,000 in a settlement related to the sale of cryptocurrency asset lending products, the Oregon Dept. of Consumer & Business Services (DCBS) reported Friday.
The settlement with Nexo Capital, Inc. was announced by the North American Securities Administrators Association (NASAA) and the U.S. Securities and Exchange Commission.
“Nexo was found to offer and sell unregistered securities throughout the U.S. and failed to disclose material information relating to the investments, DCBS said in a statement. “In Oregon, more than 1,400 people invested more than $11 million. Nexo is in process of settling with all 50 states and additional North American securities regulators for total of $25 million. The Oregon Division of Financial Regulation (DFR) will receive $424,528.30 via a payment plan with the final payment due Nov. 20, 2023. Out of that total, $42,452.83 will go to the DFR financial education account.”
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DCBS said Nexo is based in the Cayman Islands and provides virtual currency-related financial services to retail and institutional borrowers in the U.S., including trading, borrowing, and lending services.
“The investigation discovered that EIP (Earned Interest Product) investors could passively earn interest on digital assets by loaning those assets to Nexo. Nexo maintained total discretion over the revenue-generating activities used to earn returns for investors. The company offered and promoted the EIP and other products to investors in the U.S. via its website and social media channels, suggesting in some instances that investors could obtain returns as high as 36 percent,” DCBS said.