The Securities and Exchange Commission (SEC) Thursday charged Nexo Capital Inc. with failing to register a security that allowed consumers to earn interest on cryptocurrency.

Nexo agreed to pay the SEC a $22.5 million penalty and cease the unregistered offer and sale of its “Earn Interest Product” (EIP) to US investors. Nexo also agreed to pay state regulatory authorities $22.5 million in fines to settle similar charges.

The SEC’s order detailed that Nexo’s EIP allowed US investors “to tender to Nexo certain crypto assets[.]” In exchange, Nexo would promise to pay interest.  The SEC’s findings concluded that the EIP qualifies as a “security” under Securities Act Section 2(a)(1). Thus, Nexo was required to register the EIP’s offer and sale with the SEC and failed to do so.

The Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, stated that “[i]f you’re offering or selling products that constitute securities under well-established laws and legal precedent, then no matter what you call those products, you’re subject to those laws and we expect compliance.”

Nexo’s statement emphasized that in this settlement Nexo does not admit or deny the charges and the SEC’s findings. Nexo’s statement also mentions its self-view as a “pioneer” and states its view that “[a]s innovators do not quite fit into existing provisions, constructive dialogue for the enhancement of the prevailing regulatory frameworks is of paramount importance.”

Co-founder of Nexo Antoni Trenchev stated Nexo is “content with this unified resolution” and that this agreement “unequivocally puts an end to all speculations around Nexo’s relations to the United States.”

Nexo’s other co-founder, Kosta Kantchev, stated:

We are confident that a clearer regulatory landscape will emerge soon, and companies like Nexo will be able to offer value-creating products in the United States in a compliant manner, and the U.S. will further solidify its position as the world’s engine of innovation.

In addition to this Nexo settlement, various US and state agencies have cracked down on other crypto companies’ and their employees’ conduct, including FTX, Celsius, Genesis, Gemini, and CoinDeal.