Cryptocurrency platform Nexo has been sued by New York, California, and six other state regulators for failing to register with the state as securities and commodities brokers or dealers and lying to investors about their registration status.

New York Attorney General Letitia James said in a statement that despite warnings from the Office of the Attorney General (OAG) to register as a securities and commodities broker or dealer, Nexo failed to register and misrepresented to investors that they are a licensed and registered platform.

“Cryptocurrency platforms are not exceptional; they must register to operate just like other investment platforms,” said James.

“Nexo violated the law and investors’ trust by falsely claiming that it is a licensed and registered platform. Nexo must stop its unlawful operations and take necessary action to protect its investors,” she added.

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Launched in 2018, Nexo has supported over 50 cryptocurrencies, had over 5 million users and processed over $80 billion.

Through her lawsuit, she is seeking disgorgement of any revenues derived from Nexo’s unlawful conduct and restitution for investors.

The lawsuit, filed in New York County State Supreme Court, said that Nexo promoted and sold securities in the form of an interest-bearing virtual currency account called the Earn Interest Product with promises of high returns for participating investors while failing to register as a securities broker or dealer as required by state law.

In addition, the lawsuit alleged that Nexo engaged in the unregistered purchase and sale of securities and commodities through its virtual currency trading platform called “the Nexo Exchange”, and misled investors by falsely representing that it was in compliance with applicable laws and regulations.

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Roughly 10,000 New Yorkers have accounts with Nexo.