- StandardC
- Posts
- Nexo Faces $45M Fine for Lack of Proper Oversight
Nexo Faces $45M Fine for Lack of Proper Oversight
Fines continue to pile up for institutions without top-tier governance and due diligence. Nexo, a crypto lender, is the latest payment company to get hit with scrutiny.
Robert Baron
January 20, 2023
If you’re interested in learning more about our team, visit us here. If not, enjoy our write-up and we look forward to continuing to provide you with industry news every Friday.
Banking News
Capital One Cuts 1.1k "Agile" Jobs
Virginia-based Capital One decided to make cuts in one sector while actively hiring employees in other areas, including engineering and product management. Capital One seems to be striking a balance between hiring and firing, while other banks, including Goldman Sachs, Morgan Stanley, and BNY Mellon, are cutting between 1,600 – 3,200 employees each.
Pre-Recession Hiring Freeze At Bank of America
Bank of America instituted a hiring freeze in preparation for an economic downturn in 2023. Overeager 2022 hiring led to the decision to wait to add any new employees.According to CEO Brian Moynihan:
As the attrition slowed in the fall, our accelerated pace of hiring outpaced attrition, leaving us with growth in our headcount.
Credit Union News
NCUA Convenes on Federal CU Loan Interest Rate
Changing the interest rate ceiling for the Federal Credit Union loan may be on the docket in an upcoming National Credit Union Administration (NCUA) board meeting. The interest rate ceiling has been at 18% since 1987, but the Credit Union National Association (CUNA) hopes the board will consider increasing the cap over 18% or making it floating, not fixed.
CU Strategist Buddy Gill Retires
Buddy Gill was one of the minds behind the Credit Union Membership Access Act, an act signed by Bill Clinton in 1998. The coalition around H.R. 1151 preserved the credit union model and allowed for rapid growth in and advocacy around keeping CUs going.
The soon-to-be-former CUNA engagement consultant Buddy Gill said:
If the banks won a lawsuit, 10 million credit union members could have been kicked out of their credit unions and we'd no longer have multi-employee group credit unions. We really had to pass this bill in Congress to overturn a 5-4 Supreme Court loss.
Financial Services & Blockchain
Nexo Faces $45M Fines for Registration Failure
The Securities and Exchange Commission (SEC) settled with the cryptocurrency lending company Nexo over neglecting to register securities with the United States. The settlement continues a growing trend of cryptocurrency companies getting slapped with penalties for failing to register with the SEC – BlockFi paid the SEC $100M in February 2022.
The SEC Enforcement Division's representative, Gurbir Grewal, said
We are not concerned with the labels put on offerings, but on their economic realities. And part of that reality is that crypto assets are not exempt from the federal securities laws.
Bankruptcy Looming For Genesis Global Capital
Thanks to loan defaults, the crypto market collapse, and SEC investigations, Genesis Global Capital filed for bankruptcy. The company, owned by Digital Currency Group, had already laid off 30% of its workers, lost five senior executives, and was charged with selling unregistered securities through its discontinued Gemini Earn program.
