Lawsuit in England Alleges Crypto Lender Nexo Prevented Withdrawals

Cryptocurrency lender Nexo is being sued in England by investors who claim the company prevented them from withdrawing assets worth $126 million in March 2021 and then said it would allow them to do so if they sold some of the assets — their Nexo tokens — to Nexo at a 60% discount.

The investors — Jason and Owen Morton, who are brothers, and their cousin Shane Morton — said they accepted the offer in order to have the withdrawal limits removed, City A.M. reported Monday (Nov. 21).

Their lawsuit claims Nexo breached its contract by imposing withdrawal limits on the investors and that it intimidated them into selling the tokens below market price, the report stated.

In a response to the lawsuit posted on its website, Nexo said the claimants’ transactions included fixed-term arrangements and the subsequent sale of their Nexo tokens, and that spot trades of large blocks of crypto assets can involve higher spreads.

“However, all transactions, including the sale of their Nexo tokens, were completed in good faith, were documented and were accepted as final by the claimants at execution,” Nexo said in the statement.

The crypto lender added in the statement that it considers that the claim has been brought “opportunistically” because the events outlined in the lawsuit were completed in March 2021 and Nexo considered the matter closed.

This news comes about two months after Nexo announced that it had purchased a stake in federally regulated Summit National Bank one day after a report that Nexo was being sued by eight U.S. state attorneys general who claimed the acquisition violated securities laws.

As PYMNTS reported Sept. 27, in buying a minority stake in the holding company that owns Summit National Bank, Nexo has substantially expanded the scope of products it can offer, notably bank accounts.

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