A California resident filed a complaint against crypto lender Nexo citing harm from the firm’s “fraudulent inducement” to take out loans.
John Cress had a Nexo interest-bearing account and moved his digital assets to Next to earn interest, according to a complaint filed on Monday in the U.S. District Court in the Northern District of California. Cress alleged that Nexo made false assertions to get him to borrow against the digital assets he deposited and invest in complex financial products rather than just earn interest on his own assets.
The suit alleges that Cress ultimately, "suffered millions of dollars in losses because of those misrepresentations when he was liquidated of substantially all his digital assets,” according to the filing.
Cress is a long-time investor in crypto, according to the complaint. He bought bitcoin in 2014 and bought ether in 2017. He transferred those to Nexo in March 2021 to earn yield on his assets.
Cress also noted regulatory legal actions against Nexo, including the SEC’s charges in January for failing to register the offer and sale of its Earn Interest Product. Nexo agreed to pay $45 million in total to the SEC and state regulatory authorities.
Last December Nexo announced it would "gradually" leave the U.S. after unsuccessfully petitioning the Consumer Financial Protection Bureau to argue that it was outside the bureau's jurisdiction, after the consumer financial regulatory began investigating the crypto lender.
Nexo and its co-founder Antoni Trenchev rejected the claims Cress made, calling them unfounded.
"Mr. Cress has previously been in contact with us regarding his Nexo account, but he himself walked away from the conversations," a Nexo spokesperson said. "Thus, we believe that this court claim has opportunistically been filed now due to the news of our phasing out Nexo’s products from the U.S. market."
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