UK-based crypto lender Nexo said on Monday it would phase out its U.S. products and services over the coming months due to clashes with regulators.
“Our decision comes after more than 18 months of good-faith dialogue with US state and federal regulators which has come to a dead end,” Nexo said in a blog post on Monday.
Crypto lenders act like banks for the crypto world, offering customers interest on cryptocurrencies they deposit with the platform.
The firms grew rapidly during the COVID-19 pandemic, but as crypto markets slumped earlier this year various crypto lenders froze withdrawals, leaving customers with large losses. Major U.S.-based lenders Celsius, Voyager Digital Ltd and BlockFi have all filed for bankruptcy this year.
Eight U.S. state regulators charged Nexo in September for allegedly failing to register its Earn Interest Product.
California’s Department of Financial Protection and Innovation said Nexo’s interest-earning accounts promised an annual interest rate as high as 36%. Nexo said that the 36% interest was applicable only for one asset, and that it did not advertise the high rate.
Lawmakers around the world have stepped up calls for regulation of crypto firms following the collapse of major exchange FTX last month.
Nexo said it will continue to process customer withdrawals “in real-time” as it withdraws from the United States.
