Nexo, the platform that gained popularity by offering crypto lending products, has resumed new client registration in the United Kingdom today (Tuesday), the company announced.
Ensuring Local Compliance
The crypto platform detailed that before resuming onboarding, it upgraded its platform to meet all FCA guidelines. It has also partnered with Gateway 21 to ensure compliance with all financial promotion rules imposed by the UK’s Financial Conduct Authority (FCA).
“When faced with rigorous yet necessary regulation, we chose to stand firm, diligently adapting our platform to meet these stringent requirements,” said Elitsa Taskova, Chief Product Officer of Nexo.
Nexo stopped taking new clients in the UK last October, days before the local regulator implemented new guidelines around financial promotions on October 8, 2023. The rules mandated that crypto companies register for self-approval of advertisements and modify their systems to allow first-time buyers a minimum of 24 hours to reconsider their investment decisions.
Nexo was among many other companies, including PayPal, Bybit, and Luno, that suspended either taking new clients or part of their services in the country due to FCA regulations.
Interestingly, Nexo also disbanded two of its UK subsidiaries, Nexo Financial Services Limited and Nexo Clearing, last year, as a part of the group’s restructuring process. Even the platform’s co-founder, Antoni Trenchev, confirmed that the platform had no intention of leaving the European markets.
Mandatory Questionnaires
Meanwhile, Nexo has also mandated its users in the UK to undergo a set of assessments for their categorization, in accordance with FCA rules, which were completed on July 16. All existing Nexo users must “complete an Investor Categorisation and Appropriateness Assessment to maintain uninterrupted access to Nexo’s products and services.”
The first set of questionnaires was for categorizing the investors, which included three groups: restricted investors, high-net-worth investors, and certified sophisticated investors. The second set of questionnaires ensured the users’ understanding of the crypto investment risk profile, which involved products like crypto-backed credits.
Although users can take the Investor Categorisation indefinitely, the Appropriateness Assessment test has a cool-off period. After the first two successive failed attempts of the Appropriateness Assessment, a 24-hour cool-off period kicks in, which increases to seven days after the sixth failed attempt.
“The cool-off period serves the purpose of allowing you to take a step back and consider whether investing in crypto assets is indeed appropriate for you,” Nexo highlighted, adding that “these assessments ensure users' investment knowledge aligns with the Financial Conduct Authority (FCA) and its guidance.”
This article was written by Arnab Shome at www.financemagnates.com.
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