Recently, there was a crackdown against Blockfi in some US states. How will this affect Nexo going forward?

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.

Source: July’s Ask-Antoni-Anything Recapped
August 21, 2022
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