Cryptocurrency lender Nexo has entered an agreement to buy an undisclosed stake in Hulett Bancorp, which owns Summit National Bank. Summit National Bank is regulated by the Office of the Comptroller of the Currency.
Through this acquisition, Nexo will be able to merge its crypto-lending services with traditional banking services offered by Summit.
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 U.S. customers in compliance with the constantly evolving regulatory landscape.”
"We are delighted to welcome Nexo aboard," Summit National Bank President and Board Chair Forrest Gilman said in a press release. "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.”
Nexo declined to disclose the size of its newly acquired stake in Summit National Bank. The firm called the deal an “industry-changing transaction.” On top of the ability to launch new products, Nexo said its bank license would bring users enhanced legal safeguards. The deal will also help Nexo expand its footprint in the U.S., the company said.
The announcement came a day after seven states, including New York and California, brought legal action against Nexo for offering unregistered securities in the form of yield-bearing accounts which pay interest for crypto deposits. Nexo allegedly misled investors to believe it was a licensed and registered platform, according to the filings.