Nexo has reportedly acquired a stake in Hulett Bancorp (DBA Mode Eleven), the bank that owns Summit National Bank.
The deal with the US federally chartered bank offers Nexo an opportunity to further serve its US customers in a regulated environment.
Nexo, a leading regulated digital assets platform with more than $4 billion in assets under management, has announced an industry-changing deal that sees it acquire a stake in a regulated US bank.
The crypto lender revealed the transaction on Tuesday, noting in a press release sent to CoinJournal that it had taken a stake in Summit National Bank, the US federally chartered arm of Hulett Bancorp (DBA Mode Eleven).
The deal makes Nexo the preferred digital assets partner for Summit and is part of Nexo’s growing footprint in the US market.
With it, the crypto exchange and lending company provide its services to both retail and institutional clients, including bank accounts, asset-backed loans, custodial solutions and card programs among others, Nexo said in the release.
Nexo expands amid need for further compliance
The acquisition announcement comes just a day after multiple US states filed enforcement actions against Nexo, with claims the platform was offering its interest-bearing account product without the requisite registration approvals.
The New York Attorney General Letitia James said she had sued the crypto company for failing to register and lying about this to investors.
Given the cease-and-desist orders from the US state regulators for Nexo to end its yield product, today’s announcement that the platform has acquired a stake in a local US bank could suggest a response of sorts from Nexo to growing regulatory challenges.
As CoinJournal reported yesterday, eight state regulators have filed actions against the crypto company.
Indeed, Nexo co-founder and managing partner Kalin Metodiev hinted at this “evolving regulatory landscape’ in a statement, noting:
“This investment marks another landmark in Nexo’s relentless drive to better serve our US customers in compliance with the constantly evolving regulatory landscape.”
Metodiev, who recently joined the Summit National Bank board as a member, added:
“We care deeply about our customers and are thrilled that this development will grant them access to some of the most innovative products at the intersection of traditional finance and blockchain technology.”
In its press release, Nexo says that the deal will allow its customers to benefit from top quality services even as they enjoy appropriate legal safeguards available via its banking partner’s federally regulated lending and payments infrastructure.
Nexo also has long-term ambitions of securing global expansion for its banking capabilities, including through the Summit National Bank partnership and via additional banking licenses across other jurisdictions.
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