Due to SEC limitations and regulations (not Nexo's fault), there are some restrictions for US customers.
Source: Nexo Security And Insurance
Source: Licenses & Registrations
I’m unaware of the specific regulations this question addresses, but we are registered with FinTrack – the Canadian authority we answer to. So we are compliant, we have explained our model to the regulators and they have signed off on it. If something came out very very recently, I am unaware of it, but that’s why we have our brilliant legal team. They’re probably working to figure out what more we need to comply with – we are the type of company that complies, we’re not some wild cowboys that just hope to slip by regulations.
Source: Earn on Crypto
Note: Please be aware that Earn in NEXO is currently not available to US citizens and residents due to regulatory restrictions.
The new Fixed Terms functionality allows you to earn our highest savings yields – 8% on crypto and 12% on fiat – if you choose to create a term on your cryptocurrencies and fiat for 1 and 3 months, respectively. The exact fixed-term yields you earn depend on whether you receive your interest in kind or in NEXO Tokens, as well as on your Loyalty tier. Fixed Terms are not yet available for stablecoins, but we plan on making the addition in the near future as we continue to enhance our product line-up.
The former Earn offering across crypto, fiat, and stablecoins, which lets you withdraw funds at any time and brings you a unique daily payout, is now called FLEX Terms.
1. Percentage applicable to one-month term deposits:
2. Percentage applicable to three-months term deposits:
When you choose to create a Fixed Term, your interest compounds daily, like with FLEX Terms. As for the payout, regardless of whether in kind or in NEXO, you will receive all your interest earned for the duration of the term in a single payout at the end of the period.
Below is an illustrative example of how your Bitcoin savings account would look when you simultaneously use FLEX and Fixed Terms:
Please navigate to your FIXED TERM deposit by clicking on the "Managed wallets":
after that, please click on the "Fixed Terms" link:
and you will be able to see how much interest was accumulated on your active Fixed Terms until now. If you changed the option of earning interest between "in-kind" and "NEXO Tokens" you will see both interests as seen below:
As the crypto space becomes increasingly long term-focused, there is a pressing need for financial products that guarantee a stable stream of income. Fixed Terms provide just that, along with:
Combine Fixed Terms’ stable, high-yield returns for your mid- and long-term goals with FLEX Terms’ daily interest payouts and flexibility to withdraw funds at any time.
You can have 10 simultaneous Fixed Terms per asset, which means you never miss an opportunity to buy and add more assets to your Nexo Wallet to earn our highest yields.
By enabling “Automatic Renewal”, you can effortlessly rollover your initial Fixed Terms balance for an additional period of one or three months.
Fixed Terms savings yields far outshine those of traditional banks and crypto lenders that offer interest-bearing accounts. Thus, we ensure you get the most bang for your buck.
Fixed Terms balances:
With the majority of clients – at 72% – claiming they are planning to HODL their digital assets for three or more years in a recent survey, there is increasing evidence that the crypto space is evolving towards a more mature, long term-focused industry.
By Nexo's very nature, they are an enabler of this strategy because they allow you to keep your cryptocurrencies and earn high-yield passive income and take out a credit line against them without selling. In doing so, you keep the upside potential of your assets, you generate additional income, and you can finance any purchase that requires access to fiat currencies.
Longer-term investments ensure the stability of the entire market. By entrusting your assets to Nexo and their top-tier custodians that carry $375M in insurance protections, you are ensuring the resilience of your portfolio and helping Nexo build the bank of the future.
Source: Nexo Term Deposits - Explained
Source: Loan-to-Value (LTV) Explained
Everything with Nexo is dynamic. There is no loan maturity in the traditional sense, we have to have maturity dates in the terms and conditions because of various compliance requirements, but the loans get extended automatically upon maturity unless you pay them off. If you never fall below the required LTV for your particular asset class, you don’t need to take any action, you will simply continue accruing interest on your credit until you decide to repay it.
The NEXO Token is the world’s first compliant, interest-bearing token, featuring the following benefits:
Dividends are available to all NEXO Token holders, regardless of how many tokens they own and in which wallet Credit or Savings they are held, as long as two conditions are met:
The latest official information about dividend payments has been carefully explained here.
I don’t have a strict deadline for it, but it will definitely be this quarter. There will be an address book and an option to whitelist addresses. Safety is always a tricky subject, but I think we’ve done a better job than most blockchain companies. Unlike others, we’ve never been hacked even without whitelists, so we’ve done a pretty good job.
We are always looking to onboard new collateral options and add more assets to our Earn suite. It’s a matter of liquidity and market cap for each new asset. We used to make sure assets had a market cap of $1B before but now that’s a pretty low threshold since most of the top 100 coins currently already have a market cap of over $1B. We also need to ensure an asset has sufficient liquidity for us to be able to issue our price-based margin calls during volatile times. Assessing an asset’s liquidity is actually quite complicated and we have a specialized team that tracks assets and determines whether there is enough liquidity for us to be able to integrate them on Nexo.
We are working on auditing our financials so they will soon be publicly accessible and even more detailed and eloquent. Bear with us a little longer, we are in the process of doing this and our accountants are working hard going through millions of crypto-based transactions.
We’ve embarked on a mission to provide more transparency because it was a concern for our users, one that we’re addressing. That’s also why I’ve committed to monthly AMAs like this one, to make sure we’re keeping our community in the loop. So bear with us, we’re on the right track, the road to full transparency is a long one.
That’s in the pipeline, I don’t have a strict deadline, but we have had two-factor authentication on the platform for a long time now. As for YubiKey, honestly, I don’t know, we’ll see, perhaps soon.
It is definitely coming this quarter. We want to make sure we run all our tests right for the voting, and for different proposals, making sure we can actually implement the suggested changes. We don’t want people to vote for something that we later realize we can’t actually implement, so we want to be realistic about what we vote on and make sure everything checks out before we launch the official Governance Vote.
The affiliate program is set for this quarter. It has been pending for a while. People sometimes have this antagonistic view of Nexo as if we’re holding back or not working hard enough to bring these features on time, but ultimately these are all products that bring in new business for the company and we just have to prioritize and – since we’re dealing with people’s funds and transactions on the blockchain are irreversible – be extra careful about the software we put out. That’s why some things are taking a little longer.
Well, 1000 is not a very high number in my opinion. It’s not imposed by Nexo as such. This minimum is imposed by our banking partners. Unfortunately, we are still reliant on banks, so this is one of the things that we will be able to resolve quicker once we get our banking license. But I don’t have a deadline right now. Overall, we recently raised some of the minimum requirements because of transaction fees on Ethereum. I hope this is a temporary solution while Ethereum figure it out.
We, as a team, have not sold our tokens. We haven’t even touched them despite the sensational rise in our token’s value, they haven’t been moved from the smart contract – this is publicly visible. I think that speaks volumes about our conviction in our company's success. We don’t need to sell them and we don’t intend to sell them in the future.
We are in a position to finance our business through different mechanisms that allow us to grow the enterprise organically. It’s no secret that in the token terms we have company tokens that are meant as strategic reserves, but with the current dynamics of the business and the markets, we don’t need to use them.
This is not part of our core business so it’s not in the immediate pipeline. We have been talking about allocating some funds to doing something like what Binance does, where we help companies launch. But this is not a fact yet and it’s not a priority for us right now. What is currently a very high priority at Nexo is education for financial literacy. It’s an initiative that we are working on and the community is going to see more of that very soon.
That’s a good suggestion but it has some challenges when it comes to implementation. When things turn sour in the crypto space and prices start dropping, liquidity dries up extremely quickly which means we can’t guarantee we’ll be able to execute stop-losses on time. Essentially if an asset pierces through the stop-loss price too fast somebody will have to cover the extra losses and Nexo is not in a position to do this, neither do we want to pass on such costs to our clients.
However, we have been piloting products with different options and option strategies that come close to this with some of our institutional clients. To implement this for retail clients might take a long time and a lot more liquidity for us to be able to offer a product that works and makes sense.
A lot. We operate in 200+ jurisdictions, so for every major one, there’s a law firm we work with. Our internal team is close to 20 people, but the overall number of lawyers is probably in the hundreds.
If we were to go public, we are very aware that we have responsibilities to the NEXO Token holders and we will definitely take care of them should we ever decide to take this important step with Nexo.
If we mean the NEXO Token here, then I see it at double digits in the next five to 10 years. I can’t say exactly how high it will go, but I think we have substantial potential. It all depends on market conditions. If Bitcoin were to go back down to $20,000, it would drag everything else down with it. I don’t see much chance of that happening, but it is a possibility. As a company, I see us growing in a couple of directions. The space will grow, but what it means to be a blockchain company will also expand. So we’ll grow both because the space will grow and because the technology we work with will become more present in day-to-day life. I see us becoming more and more compliant because we will have our banking license. The team will also grow and that will yield more potential for the company. We’re close to 200 people now. It’s a growth story all around.
This is really not my area of expertise, I would have to talk to the dev guys. But again this would take a lot of resources and if we do it, it would have to be for larger balances.
Right now you can withdraw to a bank account, but full integrations with particular banks are further along in the future.
We’re working on a solution that will allow clients to do that even without a banking license. We may be at the very end of the banking license acquisition process, but we’re still looking for alternative ways to offer this functionality just in case something doesn’t come through.
I love to see engagement from the XRP community. We have a positive development for them that will be announced soon, so stay tuned. Now, about the airdrops, our team is leading discussions with Flare about how to best protect the interest of XRP holders. We will update you as soon as we know what the outcome of our talks with Flare is.
We haven’t slowed down on the “feature adding”. The team is still getting larger and larger which means we can engage in even more tasks and developments. This is Nexo’s main revenue driver so we’re never going to stop pushing ahead in terms of new features.
The investments we’ve made are in projects where we either don’t already have the expertise they have in a certain field or where we feel that another company is ahead of us. It makes sense to invest in such projects even just from a capital gains perspective. Despite the market downturn, in the last two months, we have seen $4 billion pour into crypto startups, so we want to be a part of that. It’s nothing gargantuan given Nexo’s total balance sheet. 95% of all startups fail so we are prepared for something like this when managing our own corporate funds. But we do feel that there are a lot of opportunities apart from the capital gains benefits, such as gaining access to certain products so that we can quickly bring certain services and offerings into production that might otherwise take us longer.
For Nexo users, this means that you get to enjoy products and services that come into fruition quicker.
Unlocking Fixed Terms defeats the purpose of locking assets, even if there is a small fee since Nexo relies on the liquidity in these locked accounts for our other products. But we will look into this going forward and see what we can do.
We do however have the Unlock Fixed Terms option. It’s a new feature that complements our Automatic Collateral Transfer. When switched on, it can automatically unlock your Fixed Term accounts if you have an open credit line and your LTV drops below the required percentage, thus protecting you from liquidations. For now, we have this feature and we are looking into further alternatives.
This is definitely a point focus due to BlockFi being under scrutiny in the United States, the continued Тether FUD, and even the crackdown against Binance. To briefly explain what’s going on: Now that crypto has grown to the size that it has, there will be regulatory interest. Now, this is something we at Nexo anticipated from the start and we’ve been actively engaging with regulators in different jurisdictions.
In general, sometimes regulators look into things – this doesn’t necessarily mean that something bad is happening or has been happening. It’s up to us as a community how we digest this news, and it’s up to the media how they wish to frame it. We have had inquiries by regulators at Nexo and so far all the cases have been closed with our services being found compliant to the regulators’ satisfaction.
As for the specific situation with BlockFi, our Earn product has a very similar offering to their interest-bearing accounts. I don’t have enough insight into exactly what their internal structure is and it may or may not be the same as ours. BlockFi themselves have stated that they believe the state regulators are wrong and that their offering does not represent a security – this is one of the allegations. It is still too early to know for sure what the crackdown on BlockFi means for Nexo since not enough of the details are public, but we will be on the lookout for what evidence BlockFi produces to counter the allegations against them and, since all our products are created and maintained in part by our expert legal teams, we will be responding to developments accordingly.
One thing in which Nexo differs from BlockFi and other competitors is that they have 80-90% of their business in the US. Whereas Nexo is based in Europe and we have a far more diverse global geographical presence. The US is a far smaller part of our business than it is for BlockFi. So regardless of what the watchdogs in the United States decide on a state and federal level, I think Nexo will be significantly less affected than our competitors who have the majority of their clients in the States.
Ultimately, we as entrepreneurs and founders of Nexo are happy that the regulators are paying attention to cryptocurrencies since we will finally have clearer rules for our industry.
This seems like a simple feature, but it’s quite complicated to make this happen on the backend. It’s very heavy on the platform, it’s very heavy accounting-wise and it’s very heavy in terms of generating yields sustainably. We don’t rely on future funding rounds to maintain our interest rates, we generate the yields through our business entirely. This concept also does not resonate well with most regulators so it’s a tricky feature to offer.
Either way, the Nexo team is looking into what the possibilities are and I will hopefully be able to update you on this in the future.