Nexo 'surprised' by actions of state regulators, says co-founder

Kalin Metodiev pointed out that Nexo has been navigating conversations with regulators over the past two years to ensure compliance, and was surprised that this news be "thrown out there in public."

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Kalin Metodiev, co-founder and managing partner of crypto lender Nexo, said his firm was "surprised" by how eight state regulators have publicly taken action against it for securities violations.< /p>

Earlier this week, the California Department of Financial Protection and Innovation (DFPI) filed a cease and desist order against Nexo's Earn Interest product, claiming the company offered a security product which had not been authorized by the government for sale in the form of an investment contract.

The DFPI also said it is joining regulators in seven other states in taking action against the company, including Kentucky, New York, Maryland, Oklahoma, South Carolina, Washington and the Vermont.

Speaking to Cointelegraph at Token2049, Metodiev explained that Nexo was caught off guard by the latest regulatory rollback, as it was "trying to be responsible" by engaging in direct conversations with regulators such as the Securities and Exchange. Commission (SEC) for some time.

"We were a bit surprised that this news came out, you know, because it's not a process that just started this week," he said, adding that:

"We have worked with our legal counsel in the United States who we have used for the past two years to guide us specifically through these waters in these conversations."

Kalin Metodiev, co-founder and managing partner of crypto lender Nexo

Metodiev said Nexo also filed with the SEC earlier this year that it was "voluntarily" stopping services for new US customers, suggesting that the company was working in good faith and aimed to be compliant...