The crypto lender is taking an ownership stake in Wyoming-based Summit National Bank despite facing current legal challenges from multiple states.
Crypto lending platform Nexo announced today that it was taking a stake in Summit National Bank, based in Wyoming. By taking a stake in the US federally chartered bank, which is regulated by the Office of the Comptroller of the Currency, the Switzerland-based Nexo is extending its footprint in the United States.
Nexo declined to disclose the terms of the private deal.
“We prefer not to focus on the size of the transaction, but rather on the mutually beneficial effects the stake acquisition will have on both companies and, more importantly, their clients,” Nexo responded in an email to Decrypt.
The announcement comes shortly after Nexo was served with a cease-and-desist notice for its Earn Interest Product, which several state regulators have called an unregistered security.
Nexo co-founder and CFO Kalin Metodiev, who will join the board of Summit National Bank, called the move “another landmark in Nexo's relentless drive to better serve our US customers in compliance with the constantly evolving regulatory landscape.”
Adding access to Nexo’s suite of products, including a cryptocurrency exchange, lending, and brokerage for digital assets, will allow Summit customers to use products at the intersection of traditional finance and blockchain technology.
Nexo says the deal will allow the firm to offer bank accounts, asset-backed loans, card programs, and escrow and custodial digital assets solutions to US retail and institutional clients.
“We are delighted to welcome Nexo aboard,” said Summit National Bank president and chairman of the board Forrest Gilman in a statement. “This is the culmination of more than two years of unfaltering dedication to combining Summit National Bank's traditional approach and values with our vision for the bank's future.”
Founded as Hulett National Bank in 1984, Summit National Bank initially focused on agricultural and real estate lending. However, with its partnership with Nexo, Summit National Bank is stepping into Web3.
In July, Nexo announced that it would acquire 100% of rival platform Vauld after Vauld halted client withdrawals, deepening Nexo's presence in Asia.
(Disclosure: Nexo is one of 22 strategic investors in Decrypt.)