Nexo, a Crypto Lender, Receives a U.S. Bank Charter

Nexo, a crypto lender, revealed that it had acquired a share in a federally regulated U.S. bank, opening the way for the company to offer banking services to Americans as a licensed institution.

Nexo, located in Zug, Switzerland, announced it had agreed to purchase an undisclosed interest in Hulett Bancorp, which controls Summit National Bank. The company intends to offer various products. It will include checking accounts and crypto-backed loans, through SNB. It holds a federal bank charter with the Office Comptroller of the Currency.

The decision is crucial for the embryonic crypto industry. It is attempting to gain favor with lawmakers and regulators as investment and acceptance of digital assets expands. Following the collapse of the contentious token terraUSD, which prompted a wave of liquidations and failures at companies such as Celsius and Three Arrows Capital, the market has been nursing its wounds.

Nexo declined to reveal the size of its investment in Summit National Bank.

The deal was an “industry-changing transaction” by the firm. In addition to the opportunity to offer new goods, Nexo claims that its bank license will provide users with improved legal precautions. The agreement will also assist Nexo in expanding its presence in the United States.

The announcement comes only one day after Nexo was slapped with lawsuits from eight different jurisdictions. They alleged that the corporation offered consumers interest-earning accounts without first registering them as securities and giving required disclosures. Moreover, according to the documents, Nexo reportedly misled investors into believing it was a licensed and registered platform. Nexo, which manages over $4B in assets, isn’t the first crypto firm to receive a banking license, but it is an unusual occurrence in the market. Previously, several fintech firms secured federal banking licenses through mergers and acquisitions.