Selling the False Crypto Dream

Surely, human beings have all the cognitive abilities at their disposal, but what they also possess is a very clear tendency to make mistakes. This has been proven time and time again throughout our history, with each testimony practically forcing us to look for a defensive cover. To the world’s credit, we will solve our conundrum in the most fitting manner once we bring dedicated regulatory bodies into the fold. Having a well-defined authority across each and every area was a game-changer, as it instantly concealed our many flaws, and by doing so, it ushered us towards a reality that we could have never imagined otherwise. Nevertheless, the utopia you’d expect to emerge from such a dynamic was pretty short-lived here, and if we are being honest, it was all technology’s fault. The moment technology allowed its layered nature to take over the spectrum; it gave everyone a clear chance to fulfil their ulterior motives at the expense of others. In case the situation didn’t sound bad enough, the whole runner will end up materializing on such a massive scale that it will expectantly overwhelm our governing forces and send them back to square one. After a lengthy spell in the wilderness, though, the regulatory industry finally looks poised for a renaissance. The same has gotten increasingly evident over the recent past, and a new lawsuit should solidify its presence moving forward.

New York Attorney, General, Letitia James and seven other US states, including California, Kentucky, Maryland, Oklahoma, South Carolina, Washington, and Vermont, have filed a formal lawsuit against the crypto player, Nexo, in relation to a possibility that the company misled its customers. According to the complaint, Nexo indulged in unfair practices by claiming that it was registered to sell securities and commodities when, of course, it wasn’t the case in reality. Now, while it might seem a little out of left field for people who aren’t exactly crypto aficionados, the dogfight between Nexo and the governing forces actually started some time ago. Last year, the New York Attorney General even wrote a letter to the company, ordering it stop offering services they weren’t authorized to offer in New York.  In response to the letter, Nexo maintained how it was already blocking New York citizens from accessing its service, and that it was set to completely shut down operations in the state by 11th November, 2021. However, going by James’ word, the company still had over “5,000 EIP accounts funded by New York investors” in July 2022,

Apart from it, the lawsuit also disputes Nexo’s claim of being in “full compliance with all applicable global and local regulations and standards”

When quizzed regarding the latest development, Nexo’s spokesperson, Magdalena Hristova responded by pointing to how the company is  “working with US federal and state regulators and understand their urge, given the current market turmoil and bankruptcies of companies offering similar products, to fulfill their mandates of investor protection by examining past behavior of providers of earn interest products.”

Notably, though, Nexo isn’t the first crypto company to be caught up in such a mishap. Earlier this year, we saw BlockFi also paying a penalty worth $100 million for selling unregistered securities.

Hot Topics

Related Articles