Former SEC Chief Blasts Nexo's $45 Mn Deal With SEC

This former SEC chief does not share Nexo's claims of success

in terms of regulatory authority and innovation after the company paid the SEC a $45 Mn fine.

Nexo Capital Inc. has agreed to pay a fine of $45 million to the U.S. SEC in response to accusations that it misled investors by selling a bitcoin lending product in violation of securities laws. A former SEC employee, however, has expressed scepticism over Nexo's self-declared "victory" in the cryptocurrency market given that the financial watchdog is assiduously chasing leading crypto firms present in the nation.

Nexo's Victory Claim

The Securities and Exchange Commission declared on Thursday that it had found that Nexo's Earn Interest Product constituted a security and should have been registered with the agency. Nexo, like every other defendant and respondent before, during, and after an investigation by the SEC, negotiated a settlement without "admitting or denying wrongdoing," according to John Reed Stark, formerly serving as director of the SEC Office of Internet Enforcement.

Nexo pays the SEC a stunning $45M but declares success for "innovation."

Stark claims that BlockFi, which paid a $100 million fine to the SEC and immediately boasted that BlockFi's surrender was a remarkable and amazing triumph for "regulatory clarity," is the company that launched the most recent cryptocurrency trend. Other bitcoin businesses are already copying BlockFi's ridiculous post-SEC enforcement settlement spin.

SEC's Conflict With Crypto Companies

In a similar vein, the SEC registration threatened to file charges against Coinbase when the American cryptocurrency exchange started advertising a programme similar to a crypto-loan, and when the financial regulator brought up a potential securities violation, Coinbase called the SEC "sketchy" in a blog post. Unsurprisingly, Coinbase finally gave in and opted not to roll out the scheme.

When Coinbase terminated its Lend programme abruptly and gave up its fight with the U.S. Securities and Exchange Commission, Stark was cited as stating, "Coinbase escaped a bullet."

Stark mentioned Gemini's main line of defence against the SEC's allegations during his discussion of the company's dispute with the SEC. This is concerning given what happened to Coinbase, BlockFi, and Nexo, as well as the fact that the SEC is being "extremely lame," according to Stark. The claims made by these corporations, which include proclaiming success for achieving "regulatory clarity," have, according to the former SEC official, become impulsive and sporadic while evoking similarities to politicians who are significantly more conservative in their messaging.