Nexo Resumes UK Client Registrations

Centralized crypto lender Nexo resumed accepting UK client registrations on Tuesday following a series of upgrades to meet compliance requirements set by the Financial Conduct Authority (FCA).

The upgrades were made in collaboration with Gateway 21, an FCA-authorized financial promotion approver. Such partnerships are increasingly common among crypto firms to ensure compliance in the UK.

Key Changes Implemented

Changes include:
– Cool-off periods
– Specialized risk warnings for UK clients
– Investor categorization questionnaire and appropriateness assessment prerequisites for platform use

Nexo’s Chief Product Officer, Elitsa Taskova, stated, “The UK has long been a cornerstone market for Nexo, and our commitment to our clients here remains resolute… we chose to stand firm, diligently adapting our platform to meet these stringent requirements.”

Educational Resources for Clients

In addition to resuming operations, Nexo plans to introduce tailored educational resources and dedicated support to help UK clients understand the FCA’s guidelines. Nexo emphasized the importance of a comprehensive onboarding process and client education regarding regulatory obligations. Taskova mentioned, “Through various educational resources, we aim to equip them to navigate the intricacies of the digital asset space with confidence and clarity.”

Background on Compliance Pause

Nexo temporarily halted onboarding in late 2023 due to new FCA regulations concerning crypto asset financial promotions. Existing clients could continue using the platform as long as they completed assessments while Nexo upgraded its compliance measures.

FCA’s New Crypto Promotions Rules

The FCA’s new regulations took effect on October 8, 2023, leading to 450 alerts regarding illegal crypto promotions. The regulations also prompted major exchanges like Coinbase and Binance to modify their operations to comply. Unregistered firms failing to adhere to these new guidelines could face severe penalties, including imprisonment or fines.

Industry Impact

These changes aim to enhance transparency in the marketing of crypto products, but many firms, including PayPal and Revolut, found compliance challenging. Others like Coinbase and Binance sought third-party assistance for regulatory compliance.

Nexo’s Position

Nexo, having previously exited the U.S. market in December 2022 and facing charges from the SEC, remains one of the few centralized lenders in the crypto sector to adapt and persist through the turbulent financial landscape post-2022. Their success is attributed to a robust business model focused on core financial principles and compliance.