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Crypto Lender Struggles Extended Creditor Protection For Vauld

A troubled cryptocurrency lending platform known as Vauld has been given an additional term of creditor protection by a court in Singapore. Before February 28th, the business has to devise a strategy for its comeback.

According to a story that was published by Bloomberg on the 17th of January, Vauld has been given more than a month to conclude its discussions with one of the two digital-asset fund managers in order to take over the executive management of the tokens that are trapped on its platform. It would seem that the argument made by the corporation that the discussions had progressed to an advanced level was sufficient to convince the high court in Singapore.

The site stopped processing withdrawals for its 800,000 clients in July 2022, claiming poor market circumstances and an unusual amount of withdrawals totaling $200 million in less than two weeks as the reasons for the decision.

It was previously given a three-month moratorium to prepare a restructuring plan for the firm and offer a better result for its creditors in August of 2022. This was done in order to prevent the company from going bankrupt. The court at the time rejected the company’s request for a six-month protection period, expressing fears that a longer moratorium won’t have proper oversight and monitoring. The judge’s decision is still in effect.

As soon as the first moratorium went into effect, it became public knowledge that Nexo, a cryptocurrency lender with headquarters in Switzerland, planned to purchase Vauld along with all of its assets.

However, once the office of Nexo in Bulgaria was searched by the authorities, Vauld denied that a transaction of this kind could ever take place.

In August of 2022, the significant Singapore-based platform Zipmex was given a ban that would last for three months so that it could resolve liquidity concerns.

The future of cryptocurrency lending in the nation is still unknown due to a proposal by the central bank of Singapore to prohibit digital payment token service providers from extending any credit facility to customers. This proposal would apply to both fiat and cryptocurrency lending.

Nexo Capital to Pay $45 Million in Penalties

Due to Nexo Capital’s failure to register the offer and sale of its Earn Interest Product, the United States Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) have agreed to levy penalties against the cryptocurrency lender in the amount of $45 million (EIP).

On January 19, the SEC and the NASAA each released their own statement announcing the news to the public.

According to the statement released by the SEC, Nexo has come to an agreement with the agency to make a penalty payment of $22.5 million and to discontinue its unregistered offer and sale of the EIP to investors in the United States.

According to the article, the extra fine amount of $22.5 million will be paid to address comparable allegations brought forth by state regulatory agencies.

According to a statement released by NASAA, the settlement in principle was reached following investigations into Nexo’s allegedly fraudulent offer and sale of securities that took place over the course of the previous year. During the course of the inquiry, it was found out that EIP investors had the potential to receive interest on digital assets that they had lent to Nexo in order to generate passive income. “Nexo exercised complete autonomy in determining which operations would generate money and be used to generate returns for investors.

Through its website and other social media platforms, the firm sold and advertised the EIP as well as other goods to potential investors in the United States. The company suggested, in certain circumstances, that potential investors might get returns of up to 36% “that was said.

The Securities and Exchange Commission (SEC) noted that throughout the negotiating process for the settlement, the commission took into account Nexo’s degree of cooperation as well as the corrective actions that were swiftly implemented by Nexo in order to remedy their deficiencies.

Nexo to terminate yield-bearing product after paying $45 million

After agreeing to pay $45 million in fines to U.S. regulators, cryptocurrency lending company Nexo Capital has decided to end its yield-bearing Earn Interest product for its customers in the United States. This decision will take place approximately one month after the company reached the settlement.

Nexo made the announcement through a blog post on February 10 and said that all production of the product will cease on April 1. By lending particular cryptocurrencies to Nexo, users were able to participate in the scheme and receive daily compounding returns on those coins.

Nexo said that the settlements that it reached on January 19 with the Securities and Exchange Commission and the North American Securities Administrators Association were the reason why it had to discontinue the offering of Earn.

Due to Nexo’s failure to register the offer and sale of its Earn product, the SEC, NASAA, and at least 17 state securities authorities conducted an investigation against the company.

In addition to paying a penalty of $22.5 million and reaching an agreement with the SEC to stop marketing its Earn product to investors in the United States, Nexo also agreed to pay an additional $22.5 million in penalties to address accusations brought by state authorities.

Nexo did not confirm or refute the conclusions of the SEC, but the company did consent to a cease-and-desist order that prevents it from breaching any aspects of securities law.

In accordance with the statement made by Nexo, Earn users will continue to be compensated with interest until April 1st. Nexo encourages consumers to “begin preparing the withdrawal of your monies” before the fixed-term product’s termination date so that they may access the product once it has been unlocked.

According to the company, other Nexo services and products would not be adversely impacted in any way.

Nexo Seeks $3 Billion in Damages from Bulgaria Over Investigation

Nexo, a cryptocurrency lending platform, has taken a significant legal step against the Republic of Bulgaria, seeking $3 billion in damages. This arbitration claim, filed through the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C., centers around allegations that Bulgaria engaged in wrongful and politically motivated actions against the company.

The origins of this conflict trace back to an investigation launched by Bulgarian prosecutors in early 2023. Nexo’s offices were raided over allegations of participation in an organized criminal group aimed at profiting from crypto lending. Four Bulgarian nationals, including Nexo co-founders Kosta Kanchev, Antoni Trenchev, Trayan Nikolov, and Kalin Metodiev, were charged following these raids. However, in December 2023, the case was dropped due to a lack of evidence and Bulgaria’s absence of a legal framework for crypto assets.

Nexo alleges that the investigation was baseless and has had a severe impact on its business operations and reputation. The company claims it was in the process of working with U.S. banks on an initial public offering (IPO), with a valuation estimated between $8 and $12 billion. Additionally, Nexo was reportedly close to finalizing a sponsorship deal with a major European football club, which would have significantly boosted its global exposure. Both of these lucrative opportunities were lost due to the investigation.

Apart from these setbacks, Nexo also faced legal challenges in the United States. The company agreed to a $45 million settlement with the U.S. Securities and Exchange Commission (SEC) and North American Securities Administrators Association (NASAA) over its Earn Interest Product. This led to Nexo discontinuing the product in April and eventually winding down its U.S. operations, citing a lack of regulatory clarity.

Nexo’s legal team, led by U.S. law firm Pillsbury Winthrop Shaw Pittman LLP, argues that the investigation by Bulgarian authorities was unjustified and oppressive, leading to significant financial and reputational damage. The claim, filed by Nexo’s Swiss subsidiary Nexo AG, seeks to recover lost opportunities and damages caused by the allegations.