"In January 2023, the US Securities and Exchange Commission (SEC) accused Nexo of offering and selling unregistered securities through this product. The SEC contended that the EIP met the legal definition of a security under the Howey Test, which examines whether an investment contract involves a common enterprise with profits derived from the efforts of others."
"Instead of directly offering yield products, Nexo now operates through regulated US intermediaries, including licensed entities and, where required, SEC-registered investment advisers. By collaborating with Bakkt, a publicly traded US crypto firm with regulatory licenses, Nexo shifts from a direct issuer model to a partner-delivered framework embedded within regulated infrastructure."
Nexo, a crypto lending platform, exited the US market in 2023 after the SEC alleged its Earn Interest Product functioned as an unregistered security, raising concerns about retail yield marketing, transparency, custody practices, and counterparty risk. The company paid a $45-million settlement to federal and state regulators. Upon reentering the US in 2026, Nexo implemented a fundamentally different operational structure. Rather than directly issuing yield products, the platform now operates through licensed US intermediaries and regulated partners. The Bakkt partnership serves as a cornerstone of this compliance strategy, with Nexo shifting from a direct issuer model to a partner-delivered framework embedded within regulated infrastructure. This structural overhaul reflects how product design, delivery mechanisms, and regulatory alignment have become central to crypto platform operations in the US market.
Read at Cointelegraph
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