Oregon DFR to receive more than $420,000 in crypto company settlement
A person who makes virtual stock trades through a mobile phone app. (Getty Images)
PORTLAND, Ore. (KOIN) — A cryptocurrency company formed in the Cayman Islands owes hundreds of thousands of dollars to the state of Oregon after it was found to have violated the state’s securities laws, state officials announced Friday.
According to the Oregon Department of Consumer & Business Services, Nexo indicated that customers could receive as much as 36% interest from its Earn Interest products.
New York Times reported that in 2020, crypto-lending platform Nexo began telling US customers that they could earn interest on any digital assets they lent to the company.
In an investigation conducted last year, state regulators found that Nexo failed to comply with Oregon’s registration requirements. Ultimately, the company sold unregistered securities to investors while failing to inform them of the potential risks associated with the EIP.
In January, the US Securities and Exchange Commission and the North American Securities Administrators Association announced that they had reached a settlement with the platform. Nexo agreed to pay a total of $45 million in fines, about half of which will go to the state regulators affected by the case.
More than 1,400 Oregon investors fell victim to Nexo’s offer, giving the company more than $11 million in assets, according to state officials. The Oregon Division of Financial Regulation says it will receive $424,528 in the settlement, with $42,452.83 allocated for the division’s financial education account.
See Oregon DFR’s full consent order against Nexo here.
In a news release, Oregon DFR Administrator TK Keen said the division will continue to work with NASAA and other state agencies “to protect Oregonians’ retirement savings investments.”
Keen added, “Cryptocurrencies and related investments are typically a volatile, higher-risk investment product. Investors must read through all of an entity’s disclosures—including what can be quite small fine print—to fully understand the risks, which underscores the importance of that consumers have the opportunity to read through this material.”
