Nexo to halt interest earnings on new top-ups for U.S. citizens effective immediately

Just received correspondence from Nexo and it looks like they’re following suit with BlockFi. Existing assets will continue to earn interest, but nothing new will. It does seem like they will try to create some new SEC approved program for interest earning in the future. All of this only applies to U.S. citizens, it’s business as usual for everyone else. My guess is Celsius and Gemini will follow soon suit as well.

Here’s the email:

Immediate Changes to Nexo’s Earn Interest Product in the U.S.
Dear ____,

As one of the world’s most trusted digital asset institutions and a company committed to compliance with applicable laws in its jurisdictions of operation, Nexo is announcing important changes to the Earn Interest Product for clients in the United States.

As the regulatory framework for digital assets continues to evolve, we remain committed to doing the same and to continue providing our clients with the best possible solutions for their digital assets.

We are encouraged by the first-of-its-kind settlement announced by the U.S. Securities and Exchange Commission and over 32 U.S. states on February 14, 2022, as it brings much-needed clarity to Crypto Asset Interest-bearing Accounts and to the provision of such services going forward.

To this effect, we would like to inform you that Nexo has voluntarily determined to implement significant changes to its Earn Interest Product in the U.S. in order to be in compliance with the newly-announced guidance.

All assets entrusted to Nexo are safe and accessible to all clients as always. Details of Armanino’s real-time audit of Nexo’s reserves can be found here.

We believe these changes, effective immediately, reflect a sustainable path forward for our Earn Interest Product in the U.S.

Key Takeaways:

The current changes only affect the Earn Interest Product for U.S. citizens and residents, while non-U.S. clients are not affected by any of these changes.

U.S. clients will continue to enjoy uninterrupted access to all other Nexo products.

Existing U.S. Clients: You will continue to earn interest on your current Savings Wallet balances only. New top-ups to your Savings Wallet as of today will not earn interest until the restructuring of the Earn Interest Product and the registration process with the relevant regulatory bodies are finalized, as per the recently announced guidance. Once complete, eligible U.S. clients will be migrated to the Earn Interest Product 2.0 and new top-ups will earn interest.

Please note that any assets withdrawn from your Savings Wallet, even if returned later, will be treated as new top-ups and will not earn you interest.

New U.S. Clients: The Earn Interest Product in its current form will not be available for new U.S. clients until the restructuring into Earn Interest Product 2.0 and the registration process with the relevant regulatory bodies are finalized, as per the recently received guidance. Once complete, the Earn Interest Product 2.0 will become available for all eligible clients.

Earn Interest Product 2.0: Our team and legal advisers are working around the clock to develop solutions for our U.S. clients that will make the Earn Interest Product 2.0 as widely accessible as possible and compliant with the new regulatory realities. We will provide more details as soon as possible.

We are firm believers in blockchain’s transformational powers and in meaningful, innovation-oriented regulation in partnership with the blockchain industry itself. We have never been more excited and confident about the road ahead, as the recently provided regulatory clarity will undoubtedly ensure even wider adoption of digital assets and the gradual increase of the total addressable market.

To our clients and supporters – we most humbly thank you for your continued support. Rest assured that we will continue to develop and enhance Nexo’s products and services with your best interest in mind.

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