Crypto

Crypto lender Nexo files legal action against Cayman Islands regulator

  • Nexo was rejected for a virtual asset license by CIMA due to the company not meeting the required risk profile.
  • Nexo recently announced that it will be leaving the United States following a fallout with regulators.
  • The crypto market recovered nearly $130 billion over the past week to bring the total value of all cryptocurrencies to $944 billion.

Nexo has been in the headlines for the past two weeks for reasons that have increasingly gone in its favor. According to the most recent development, the cryptocurrency lending platform found itself at a crossroads with the regulatory authority of another country following the United States.

Nexo v Cayman Islands Monetary Authority

Nexo, in a January 13 filing, sued the Cayman Islands Monetary Authority (CIMA) over the denial of a virtual asset license. The lawsuit came after the regulator rejected the crypto lender’s application due to the company not meeting the necessary risk profile.

The monetary authority noted that Nexo’s approval for a license would pose “a risk to market confidence, consumer protection and the reputation of the Cayman Islands”.

However, Nexo and its lawyers opposed the outcome, saying CIMA’s decision was unfair and that the regulator failed to meet its constitutional and legal obligations. Indeed, Nexo did not receive a detailed reason for the rejection of its application.

With the lawsuit, Nexo is not only seeking to overturn the decision of the Cayman Islands Monetary Authority, but also to rule in favor of registering the crypto lender. Pronouncing Nexo as fit for registration and ordering CIMA to register the company is Nexo’s goal by the end of the trial.

This isn’t the first time Nexo has locked horns with a regulator, as early last month the crypto lender also had a fallout with US regulators. In a first-of-its-kind event, Nexo announced that it would also pull out of the country, phasing out its products and services in the coming months.

Nexo said that despite its cooperation with state and federal regulators, including the Securities and Exchange Commission (SEC), inconsistent rankings prompted the move.

Crypto Market Cap Nears $1 Trillion

The crypto market has managed to rise over $128 billion in the past seven days, bringing the total market capitalization to $947 billion at the time of writing. The value of everything cryptocurrencies is almost ready before the FTX collapse of November 2022, which wiped out $255 billion from the market.

Total Crypto Market Cap

With Bitcoin crossing the $21,000 mark and the leader in altcoins, Ethereum, trading near $1,600, the crypto market is expected to reclaim the $1 trillion mark soon. If the bullish momentum persists over the next few days, another 5% rally should not be difficult for the market to pull off.

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