Nexo Re-Enters US Market with Structural Overhaul, Partnering for Compliance

Three years after exiting the United States and agreeing to a $45 million settlement with federal and state regulators, Nexo has formally reentered the U.S. market. This return, however, is not a simple relaunch but rather a significant structural overhaul, reflecting a fundamental shift in how the company designs, delivers, and operates its products within the evolving regulatory landscape. The changes address the specific objections regulators raised in 2023 and signal a new paradigm for crypto lending services in the U.S.

Nexo’s initial U.S. presence was largely built around its Earn Interest Product (EIP), which allowed users to deposit cryptocurrencies and earn yield. This product came under intense scrutiny in January 2023 when the U.S. Securities and Exchange Commission (SEC) accused Nexo of offering and selling unregistered securities through the EIP. The SEC contended that the product met the legal definition of a security, necessitating proper registration. Nexo subsequently consented to a $45 million settlement with the SEC and state securities regulators, leading to its withdrawal from the U.S. retail market.

The regulatory action against Nexo was part of a broader crackdown on crypto lending products following a series of major industry failures in 2022. These failures exposed significant liquidity mismatches, rehypothecation risks, and the inherent opaqueness of many yield-generating structures, leaving retail investors exposed. Regulators expressed particular concern about the lack of transparency regarding how these yield products were funded, the potential for conflicts of interest, and the risks associated with platforms promising high yields without adequate risk disclosures. This broader enforcement trend indicated a significant regulatory pivot towards a more stringent oversight of centralized crypto yield offerings.

The current crypto lending environment, while still presenting risks, differs considerably from the post-2022 fallout. Borrowing against volatile assets is not a new concept; traditional stock margin lending has existed for decades. However, the 24/7 trading nature of cryptocurrencies introduces far more dynamic and automated liquidation mechanisms. This necessitates a robust understanding of collateral management and risk.

Nexo’s 2026 comeback is anchored by a core claim: its product offering has been fundamentally restructured and is now delivered through licensed U.S. partners. Instead of directly providing yield-like products to U.S. investors as it did previously, Nexo’s updated structure is designed to operate within a regulated infrastructure framework. This distinction is crucial, positioning Nexo not as an independent provider of an earn program, but as a participant within a compliant ecosystem. The company now intends to offer crypto-backed loans and yield-generating products, but these services will be facilitated by licensed U.S. partners.

Crypto-backed loans differ significantly from the unsecured lending models that proved unsustainable in 2022. In this model, users deposit digital assets as collateral to borrow against them. Liquidations are triggered if the value of the collateral falls below predetermined loan-to-value thresholds, a mechanism designed to protect both the lender and the borrower by managing risk.

A pivotal element of Nexo’s relaunch strategy is its collaboration with Bakkt, a publicly traded U.S. cryptocurrency firm. Bakkt provides regulated trading infrastructure and holds multiple U.S. licenses, including those necessary for operating within the digital asset space. By channeling its U.S. operations through these regulated entities, Nexo has transitioned from a direct issuer model to a partner-delivered model. This means that instead of Nexo directly holding customer assets or providing the lending products, Bakkt and other licensed partners will manage the operational and regulatory aspects of these services for U.S. customers. This framework is specifically designed to address the regulatory objections that led to the 2023 settlement, emphasizing compliance from the outset.

It is important to note that, unlike traditional banks, most crypto lending platforms do not benefit from federal deposit insurance. Consequently, customer protections are heavily reliant on the robustness of custody structures, legal agreements, and the regulatory compliance of the platform and its partners, rather than government backstops.

The timing of Nexo’s return to the U.S. market is also noteworthy, coinciding with a shifting regulatory landscape. Under the administration of President Donald Trump, the SEC has terminated or scaled back several enforcement actions related to the crypto industry, indicating a potential recalibration of its approach. The enforcement environment has moved from an intense crackdown to a period of adjustment and reevaluation. For example, the SEC moved to drop a lawsuit involving the Gemini Earn program following successful investor recoveries. While this does not signify a complete resolution of crypto lending issues, it suggests a more adaptable regulatory stance compared to early 2023. However, the U.S. regulatory framework for crypto remains fragmented, with federal agencies, state securities regulators, money transmitter statutes, and consumer lending rules all potentially applicable depending on the specific structure of a service.

For U.S. users considering engaging with Nexo’s offerings, several factors warrant careful attention. Even when products are offered through regulated intermediaries, users must thoroughly assess the licensing and regulatory standing of the partner companies involved, understand the specific terms and conditions of any crypto-backed loan or yield-generating product, including fees, interest rates, and liquidation triggers, and evaluate the security and custody arrangements for their digital assets. It is crucial to remember that a "compliant structure" does not automatically equate to a "risk-free product." Money transmitter licensing in the U.S. is state-based, requiring companies to obtain approvals in numerous jurisdictions. This complexity is a significant driver behind the increasing popularity of partner-led models.

Nexo’s re-entry into the U.S. market could signify a broader transformation within the U.S. crypto lending industry. If this partner-led, compliance-focused framework proves successful and sustainable, it may pave the way for other international crypto companies to re-enter the U.S. market through similar compliance layers, moving away from direct issuance models. This approach emphasizes integration into existing regulatory structures rather than operating outside of them.

The fundamental shift in Nexo’s strategy lies in its wrapper, not just its product. The underlying economic concept of generating yield on digital assets or borrowing against crypto remains viable. What has evolved is the regulatory framework surrounding these activities. Instead of pushing the boundaries of securities law, Nexo’s updated model integrates into licensed infrastructure. The long-term success of this approach will hinge on the efficacy of the partner model in meeting regulatory expectations and its ability to maintain robust risk management practices. For now, Nexo’s comeback reflects a more cautious and compliance-oriented crypto industry, recognizing that in the U.S., navigating the regulatory structure is paramount for survival and growth.