Nexo is ending some of its crypto services for clients in the United Kingdom. This is in response to the upcoming regulatory changes imposed by the Financial Conduct Authority (FCA).
According to a report by Coindesk, the crypto platform will phase out cashback payouts for transactions on Nexo Exchange and Nexo Card as well as terminate their referral and affiliate programs effective from October 8.
This move aligns with the FCA's stringent promotion rules for the cryptocurrency industry, requiring companies to be registered for self-approval of advertisements and to modify their systems to allow first-time buyers a minimum of 24 hours to reconsider their investment decisions.
Nexo Adapting to FCA Regulations
Nexo joins the ranks of companies adjusting their offerings to align with FCA's regulations, which will be effective from October 8. Several companies, including PayPal and Bybit, have withdrawn specific crypto-related services from their offerings to UK clients.
In August, PayPal announced its intention to suspend cryptocurrency sales to its users in the UK for at least three months, commencing on October 1. Similarly, Bybit announced last month that it will no longer accept new account applications from residents in the UK. Furthermore, on October 8, the exchange will no longer accept new deposits, halt new contracts, and limit changes to existing user positions.
Last month, another crypto exchange, Luno announced that it wastemporarily halting certain crypto investments for its clients in the UK beginning October 6. While clients affected by Luno's temporary suspension can still sell existing holdings and withdraw funds, they cannot make new crypto investments as of October 6.
Restructuring and Legal Challenges
In May, Nexo disbanded two of its subsidiaries in the UK, Nexo Financial Services Limited and Nexo Clearing. This move was revealed in an official filing with the UK Companies House, as reported by Bloomberg. However, Nexo's Co-Founder, Antoni Trenchev, emphasized that the company was not leaving the European markets. Instead, he mentioned that it was undergoing a restructuring process and reevaluating how it provides services for its clients.
This decision coincided with a legal tussle against the company in Bulgaria. In January, Bulgarian prosecutors opened an investigation against Nexo, accusing the company of failing to prevent money laundering and violating sanctions against Russia.
This article was written by Jared Kirui at www.financemagnates.com.
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