The crypto market has been battered this year, with nearly $2 trillion wiped out of value since its peak.
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Cryptocurrency lender Nexo on Tuesday announced it has acquired a stake in a federally regulated U.S. bank, paving the way for the company to offer banking services to Americans as a licensed organization.
Nexo, based in Zug, Switzerland, said it had agreed to buy an undisclosed stake in Hulett Bancorp, which owns atThe le-floating bank is called Summit National Bank. Through National Summit Bank, a federal bank charter holder with the Office of the Comptroller of the Currency, Nexo plans to offer a range of products including checking accounts and backed loans. electronic money support.
The move is a significant development for the nascent crypto industry, which is looking to win the support of politicians and regulators when it comes to digital asset investment and adoption. increasing. The market healed itself after the collapse of the controversial terraUSD token, which sparked a wave of liquidations and failures of companies like Celsius and Three Arrows Capital.
Nexo declined to disclose the size of its stake in Summit National Bank. The company calls the deal an “industry-changing transaction”. In addition to the ability to launch new products, Nexo says its banking license will give users enhanced legal protections. The deal will also help Nexo expand its footprint in the US, the company said.
Antoni Trenchev, co-founder of Nexo, told CNBC: “We had a strong offer regarding crypto-backed loans but we always wanted more than one option to offer one. Specific services”.
“Acquisition of shares in a full-fledged bank allows us to offer a full range of services to US institutional and retail clients, including bank accounts, loans secured by assets, token programs, as well as escrow and custody solutions, and more future plans for Nexo’s expansion in the United States will be announced in the coming months.”
Summit National Bank dates back to 1984 in Wyoming, where the company was originally chartered as Hulett National Bank. The company later opened locations in Idaho and Montana. According to its website, Summit National Bank’s primary lending is “commercial, agricultural, real estate, mortgage and construction.”
The news came just a day after Nexo was hacked lawsuits from eight US states alleging that the company provided users with interest-earning accounts without pre-registering as securities and providing the necessary disclosures. Nexo allegedly misled investors into believing it was a licensed and registered platform, according to the filing.
In response to the legal action, Nexo said it was working with US federal and state regulators. The company has sought to set itself apart from other players struggling financially, saying it “does not participate in decentralized loans, is not exposed to LUNA/UST, is not guaranteed or need to use any withdrawal restrictions.”
Nexo, which has more than $4 billion in assets under management, is not the first crypto company to obtain a banking license, although it is a rare phenomenon in the industry. Other fintech companies that have previously obtained federal banking charter through mergers and acquisitions include SoFioffers cryptocurrency trading on its platform, and LendingClub.