Nexo, Celsius Feel the Heat of the US Crypto Regulatory Crackdown
Set of physical golden coin Nexo (NEXO), digital cryptocurrency. Nexo (NEXO) icon set. Vector illustration isolated on white background.
Over the past decade, the crypto industry has expanded from an experimental project to a huge financial sector. Notably, the use of digital assets as an alternative mode of payment and investment platform is steadily gaining space.
Subsequently, regulatory agencies in different parts of the world are intensifying their efforts to control the industry’s dealings. In the recent past, the crypto regulatory crackdown has particularly been heightened in China and the United States.
In the US, Nexo and Celsius are among the latest victims of the crackdown. On Monday, New York’s Attorney General (AG), Letitia James indicated that two crypto lending companies have received cease-and-desist letters. Nexo is among the addressed firms. Additionally, three additional firms – including Celsius – got requests for information regarding their handling of user deposits and corporate ownership.
As a reaction to the cease-and-desist letter, Nexo Ceo, Antoni Trenchev has stated, “Nexo is not offering its Earn Product and Exchange in New York…But we will engage with the NY AG as this is a clear case of mixing up the recipients of the letter.” In the case of Celsius, this is not the first time that the company has been subject to regulatory actions. In the previous month, authorities in New Jersey and Texas accused it of unregistered securities offering.
The move by New York’s AG is a sign that regulatory issues will likely continue haunting the crypto market in the foreseeable future. For instance, the case by the Securities and Exchange Commission (SEC) against Ripple has been ongoing for close to a year. The agency accused the firm for raising funds via an unregistered securities offering. While the ongoing crypto wave has boosted the altcoin above 2020’s levels, the court case has impacted the altcoin’s price movements.