While the bear market has taken hold, the loan platform Nexo is taking several steps backwards and announcing the closure of its services to US citizens within a few months. The reason: difficulties in adapting to the sometimes ambivalent demands of the regulators.
Nexo to end its services in the US
After 18 months of debate with the US authorities, the Nexo platform has declared that it will close its services to its customers living in the US within a few months.
The reason given by the company? Too strict regulations preventing it from continuing its activity. Despite Nexo’s willingness to talk to regulators, these discussions have led to an “impasse”.
Today we are announcing the regrettable but necessary decision that Nexo will be phasing out its products and services in the United States due to a lack of regulatory clarity.
– Nexo (@Nexo) December 5, 2022
Today, we announce the unfortunate but necessary decision that Nexo will phase out its products and services in the United States due to a lack of regulatory clarity. “
In addition, Nexo said it is discontinuing its “Earn” product in eight US states effective immediately:
- Indiana;
- Kentucky;
- Maryland;
- Oklahoma;
- South Carolina;
- Wisconsin;
- California;
- and Washington State.
Regulation too vague
In its press release, Nexo discusses its relationship with the US authorities. It lists the numerous efforts made to adapt to the demands of the American regulation.
While the discussions between the various players were encouraging, the various collapses of the Terra ecosystem (LUNA) and the recent bankruptcy of FTX have led to changes in the opinions of certain regulatory authorities, as Nexo points out:
“We have reached a situation where regulators are unwilling to coordinate with each other and insist on taking incompatible positions, creating an impossible environment in which to operate effectively and create value for our customers.
Remember that 2022 was a dark year for centralised lending and borrowing platforms: Celcius, Voyager Digital and BlockFi all declared bankruptcy.
Despite this, Nexo is reassuring about its customers’ funds: platform users are able to withdraw their assets at any time.
