Nexo bounces back from recent troubles as it obtains license approval in the Middle East.

Nexo, a cryptocurrency lending platform, is seeking to overcome its challenges in Bulgaria and the United States with the approval of its Dubai entity by the Virtual Assets Regulatory Authority (VARA) of the emirate. The initial approval granted to Nexo Services FZE covers virtual asset lending and borrowing, management and investment, and broker-dealer services. To fully provide these crypto services to regional clients through its mobile and web platforms, the company must now progress through subsequent phases, including obtaining a preparatory license and a final operating license. Kalin Metodiev, co-founder and managing partner at Nexo, sees this initial approval as a significant milestone for their global expansion efforts, which have already attracted seven million clients worldwide.
Nexo’s decision to focus on the United Arab Emirates follows its troubles in the US, resulting in the discontinuation of its yield-bearing Earn Interest offering for US customers. The company agreed to pay $45 million in penalties to the Securities and Exchange Commission and the North American Securities Administrators Association for failing to register the product. Nexo co-founder Antoni Trenchev expressed satisfaction with the resolution, stating that it puts an end to any speculation about Nexo’s relationship with the US, allowing them to concentrate on developing financial solutions for their global clientele.
Nexo also encountered problems in Bulgaria, leading to its claim for $3 billion in damages after local authorities withdrew their charges of illicit operations. The allegations, which accused Nexo of orchestrating a crypto lending scheme from 2018 to 2023, were dismissed in December 2023 due in part to the country’s lack of a clear legal framework for crypto assets. In contrast, the United Arab Emirates, home to financial hubs Abu Dhabi and Dubai, has become an attractive destination for global cryptocurrency players due to its regulatory clarity and straightforward compliance procedures. Earlier this year, VARA granted a VASP license to the Dubai subsidiary of crypto exchange OKX, although the license is not yet operational as the platform works towards meeting regulatory requirements. It is expected to become active in the coming months.