Nexo, a crypto company, makes US comeback after regulatory dispute

Crypto company Nexo has announced its return to the United States after a three-year absence prompted by regulatory clashes, during which it paid a hefty $45 million fine. Founded by former Bulgarian lawmaker Antoni Trenchev, Nexo settled charges brought by U.S. regulators regarding a crypto lending product that the Securities and Exchange Commission deemed should have been registered as a security. Although Nexo did not admit or deny the SEC’s findings under the settlement, they have decided to re-enter the U.S. market.

Partnering with Bakkt, a listed crypto company, Nexo plans to offer crypto-backed loans and yield-generating products to U.S. customers. Acknowledging their previous missteps, Nexo has discontinued the product covered by the 2023 SEC order for U.S. investors as mandated. The current U.S. offering is structured differently and involves the collaboration of appropriately licensed U.S. partners, including an SEC-registered investment adviser for advisory services. Despite Nexo’s efforts to comply with regulations, the SEC declined to comment on its return.

Antoni Trenchev’s connections with the Trump family have attracted attention. Trenchev had a meeting with former President Donald Trump at his Scottish golf resort in July, where Nexo was a lead sponsor of a golf championship. The two discussed politics and their shared vision for crypto in the U.S. After Trump took office, the SEC ended its crackdown on crypto companies, indicating a shift in his stance on the matter. Nexo also hosted Donald Trump Jr. at a business event in Sofia, Bulgaria, last April, but the company maintains that its return to the U.S. is not influenced by its associations with the Trump family.

Nexo insists that their compliance with regulatory requirements, rather than interactions with the Trump family, is the primary reason for their U.S. reentry. The company clarifies that its sports partnerships and event participation are unrelated to its regulatory or operational status in the U.S. Meanwhile, the Trump Organization has ventured into the crypto space with its own company, World Liberty Financial, resulting in increased income. Some experts have raised concerns about potential conflicts of interest as the Trump family develops crypto initiatives while Trump oversees U.S. crypto policy, but the White House denies any conflict exists in this regard.

As Nexo navigates its return to the U.S. market, the company’s renewed focus on compliance and partnerships with established entities signal a strategic shift in its operations. By ensuring that its products are offered within the regulatory framework and through licensed partners, Nexo aims to rebuild trust and expand its presence in the U.S. market. With regulatory challenges behind them, Nexo’s comeback highlights the evolving landscape of the crypto industry and the importance of compliance in sustaining growth.