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- Nexo was denied a virtual asset license by CIMA because the company does not meet the required risk profile.
- Nexo recently announced it was exiting the US following clashes with regulators.
- The cryptocurrency market recovered nearly $130 billion last week, bringing the combined value of all cryptocurrencies to $944 billion.
Nexo has been making headlines over the past few weeks for increasingly unfriendly reasons. According to the latest developments, cryptocurrency lending platforms are at a crossroads with regulators in other countries following the United States.
Nexo v Cayman Islands Monetary Authority
In a Jan. 13 filing, Nexo sued the Cayman Islands Monetary Authority (CIMA) following the denial of its virtual asset license. The lawsuit follows the regulator’s rejection of the cryptocurrency lender’s request because the company did not meet the required risk profile.
The financial authority said approval of the license by Nexo poses “risks to market confidence, consumer protection and the reputation of the Cayman Islands.”
However, Nexo and its attorneys opposed the outcome, saying that CIMA’s decision was unfair and that the regulator failed to meet its constitutional and statutory obligations. This is because Nexo did not provide detailed reasons for rejecting the application.
With this lawsuit, Nexo not only hopes to override the Cayman Islands Monetary Authority’s decision, but also seeks rulings in favor of cryptocurrency lender registrations. It is Nexo’s goal by the end of the lawsuit to declare Nexo suitable for registration and to order CIMA to register the company.
This isn’t the first time Nexo has had a run-in with regulators, with cryptocurrency lender Nexo also clashing with US regulators earlier this month. At the first-of-its-kind event, Nexo announced that it will be phasing out its products and services and exiting the country in the coming months.
Nexo said inconsistent rankings prompted the move despite cooperating with state and federal regulators, including the Securities and Exchange Commission (SEC).
Cryptocurrency Market Capitalization Nears $1 Trillion
The crypto market has gained over $128 billion in the last seven days, reaching a market cap of $947 billion at the time of writing. The value of all cryptocurrencies was nearly level before his FTX collapsed in November 2022, wiping his $255 billion from the market.
total crypto market capitalization
With Bitcoin surpassing $21,000 and altcoin leader Ethereum trading near $1,600, the cryptocurrency market is poised to reclaim $1 trillion soon. If the bullish momentum continues over the next few days, it wouldn’t be difficult for the market to achieve another 5% gain.
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