The Ohio Division of Securities added its name to the $22.5 million multistate settlement against the cryptocurrency lending platform Nexo. 

The Ohio Division of Securities has issued a consent order against Nexo Capital, a Cayman Islands-based corporation that provides cryptocurrency-related financial services. Nexo’s Earn Interest Product (EIP) promised to pay investors interest on cryptocurrency deposited into a Nexo “crypto interest account.” However, during an investigation by a working group of state securities regulators, it was discovered that Nexo had failed to comply with state securities registration requirements, depriving investors of important information necessary to understand and evaluate the risks of investing in the EIP.

As a result, Nexo has agreed to pay $22.5 million to settle the allegations with Ohio and other U.S. states, including Puerto Rico and the U.S. Virgin Islands. It will pay $424,528.30 per jurisdiction to resolve the violations. Additionally, Nexo has agreed to stop offering and selling the EIP in Ohio and will cease paying interest on all existing EIP accounts on April 1, 2023, unless the EIP is properly qualified for sale in Ohio.

As of July 31, 2022, there were 2,327 Ohio EIP accounts with a value of $15,858,147. Nationally, Nexo had 93,318 EIP investors in the U.S. with a total asset value of $800.26 million. In response to the settlement, Securities Commissioner Andrea Seidt stated that “all financial services companies, including those offering services for crypto assets, must comply with Ohio’s securities laws” and that they will continue to protect Ohioans’ investments and ensure that companies operating in Ohio follow their securities laws.