Cryptocurrency lender Nexo is facing regulatory actions in eight US states for allegedly offering an investment product that violates securities laws.

State regulators in California, New York, Washington, Kentucky, Vermont, South Carolina, Maryland and Oklahoma are issuing statements centered on Nexo’s Earn Interest Product (EIP).

The office of South Carolina Attorney General Alan Wilson says the regulatory actions are the result of a “working group of state securities regulators” targeting interest-bearing cryptocurrency accounts.

“The Division alleges that Nexo violated the South Carolina Securities Act by offering and selling unregistered or unqualified securities in the form of its EIP accounts and that Nexo and its co-founders misrepresented and omitted material facts about the EIP accounts.”

The desist and refrain order issued by California’s Department of Financial Protection and Innovation Commissioner Clothilde V. Hewlitt says Nexo failed to register the account as a security.

“The Commissioner is of the opinion that the Earn Interest Product accounts offered and sold by the Nexo Group, Nexo Inc., and Nexo Capital Inc. are securities, in the form of investment contracts, under California Corporations Code section 25019… and have been offered and sold without prior qualification, in violation of California Corporations Code section 25110.”

Before clamping down on Nexo, multiple state regulators also initiated legal actions against the embattled crypto lender Celsius Network.

Regulators in Alabama, Kentucky, New Jersey, Texas and Washington probed into the company after it halted withdrawals in June.

California’s financial services regulator also issued a desist and refrain order against the company, alleging that its Earn Rewards accounts offered unregistered securities. Vermont’s financial regulator likewise accuses the company of making spurious claims about its compliance with securities laws.

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The post Multiple State Financial Regulators Allege Crypto Loan Platform Nexo Violates Securities Laws appeared first on The Daily Hodl.