Crypto lender Nexo confirms NYAG order, calls it a ‘mix up’

Published at: Oct. 19, 2021

Cryptocurrency lending firm Nexo Financial denies the allegations of offering unregistered services to New Yorkers put forth by Attorney General Letitia James.

Attorney General James directed two unnamed crypto lending companies to cease operations on Monday, citing failure to register the business in New York and performing unlawful activities.

Crypto lender Nexo is revealed to be one of the two companies to receive the cease and desist order from the Office of the Attorney General. Denying its involvement in unlawful operations, a Nexo spokesperson said:

“Nexo is not offering its Earn Product and Exchange in New York, so it makes little sense to be receiving a cease and desist order for something we are not offering in New York anyway.”

According to Nexo, the allegations of operating an unregistered business in New York “appears to be a case of mixing up the recipients of the letter.” The company also confirmed the use of IP-based geoblocking on its platform that prevents New Yorkers from participating in locally unregistered services:

“Still, we will engage with the NY AG and seek clarity. Our company retains top-tier legal counsel both from US-based law firms and our in-house legal team.”

In addition, the company has also highlighted that the Nexo Terms and Conditions explicitly state, “We do not offer our Earn product and Exchange in New York.”

To further protect New Yorkers from significant undisclosed risks, the New York State Office of the Attorney General has parallelly directed three more crypto platforms to provide information about their activities and products.

The order to shut down operations is backed by the Martin Act, which requires businesses to register before offering or selling securities or commodities in New York. “My office is responsible for ensuring industry players do not take advantage of unsuspecting investors,” said James.

Related: New York businesses ask governor to deny permits for crypto mining

A group of local New York businesses co-signed a letter asking New York State Governor Kathy Hochul to deny permits for repurposing the city’s defunct fossil-fuel power plants for crypto mining.

The proposal demands an assessment of the environmental impact of restarting the Greenidge Generating Station and the Fortistar North Tonawanda plants, which were shut down to control New York’s greenhouse gas emissions.

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Regulation
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Cryptocurrencies
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New York
New York State
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