California, New York and other U.S. states take action against crypto lender Nexo

Quick Take

  • California’s Department of Financial Protection and Innovation issued a cease and desist against crypto lender Nexo Monday over its crypto interest-bearing accounts. The Department of Financial Protection and Innovation considers these accounts securities.
  • New York’s Attorney General announced a lawsuit against Nexo, accusing it of selling unregistered securities in the state.
  • Other U.S. state securities regulators, including Vermont, are pursuing actions against Nexo.

A group of U.S. state regulators announced an array of legal actions against crypto lender Nexo on Monday.

California's Department of Financial Protection and Innovation issued a cease and desist against crypto lender Nexo Monday over its crypto interest-bearing accounts.

The cease-and-desist document alleges that Nexo's Earned Interest Product accounts are securities and "have been offered and sold without prior qualification, in violation of California Corporations Code section 25110."

"As of July 31, 2022, over 18,000 California residents have active Earn Interest Product flex- or fixed-term accounts; these accounts collectively hold investments totaling at least $174,800,000," the filing said.

In a separate announcement, New York Attorney General Letitia James announced a lawsuit against Nexo. 

“Nexo violated the law and investors’ trust by falsely claiming that it is a licensed and registered platform. Nexo must stop its unlawful operations and take necessary action to protect its investors," James said in a statement. New York is seeking to permanently bar Nexo from selling securities in the state, per the complaint.

Vermont published a cease-and-