Banking & Finance

UK crypto lender Nexo to set up in Emirates

March 9, 2023

Antoni Trenchev, co-founder of Nexo, says they manage $3 billion of transactions each day — Antoni Trenchev, co-founder of Nexo, says it has $3 billion assets currently under management

150 workers to be recruited
Company will set up in Dubai
MD says most bad crypto actors have been ‘washed out’

UK-based crypto lender Nexo is opening offices in the UAE as it looks to grow its Middle East business to 30 percent of its total global operations.

The company, which has five million users across 200 jurisdictions, is setting up in Dubai where a workforce of 150 will be recruited, according to MD and co-founder Antoni Trenchev.

“We are seeking two lines of regulation,” Trenchev said. “One is for the crypto-related activities, and the other will be for more traditional offerings associated with wealth management.

“There appears to be a political will to create a blockchain fintech financial hub in the region but more specifically Dubai and Abu Dhabi, which is always welcoming,” he said.

“Not all jurisdictions and governments have this level of comfort and desire to interact with crypto and fintech.”

Trenchev’s comments could be aimed particularly at regulators in the US, after Nexo was sanctioned by the Securities and Exchange Commission (SEC) in January for failing to regulate a crypto lending product.

SEC chairman Gary Gensler said at the time: “Compliance with our time-tested public policies isn’t a choice. Where crypto companies do not comply, we will continue to follow the facts and the law to hold them accountable.”

Nexo agreed to pay a $45 million penalty to both the SEC and state regulators without admitting or denying the SEC’s findings.

It also prompted the company to halve the number of products and services it offers in the US market as of April 1 this year.

“In the Middle East the rules are being developed as we go, but there is the clear desire to have the business here,” Trenchev said.

“Whereas in the US, when you deal with the various agencies and you assess their moves, you’re not really sure whether they want to have any crypto there apart from maybe bitcoin.

“I think for investors and clients the regulatory dangers were hanging over our collective heads like the sword of Damocles. It’s no way unique for Nexo – everybody is on edge about how the regulators are going to react.

“A lot of companies got sued by the SEC and a few like Nexo and Kraken were able to put the US saga behind them by settling.”

The market value of cryptocurrency fell from a peak in 2021 of $3 trillion to just over $1 trillion as the war in Ukraine, coupled with inflationary fears and higher interest rates, hit markets.

This, alongside a number of scandals including the high profile collapse of FTX which handled an estimated $1 billion of transactions each day, sent shock waves across crypto exchanges.

Trenchev said Nexo has gone from managing about $15 billion to $3 billion today.

“The industry as such is not without sins,” he said. “I like to think that a lot, if not most, of the bad actors have been washed out of the crypto ecosystem.

“It is a cleansing of the space that will lead to further and higher standards for people to adhere to.”