On Tuesday, cryptocurrency lender Nexo announced that it had acquired a stake in a federally regulated U.S. bank, paving the way for the company to offer banking services to Americans. Based in Zug, Switzerland, Nexo announced it has agreed to purchase an undisclosed stake in Hulett Bancorp, which owns Summit National Bank, a little-known institution. Using Summit National Bank, which has a federal bank charter with the Office of the Comptroller of the Currency, Nexo will offer a range of products, including checking accounts and crypto-backed loans. The move represents an important development for the nascent crypto industry, seeking political and regulatory support as investment and adoption of digital assets increase. Since the collapse of terraUSD, which triggered a wave of liquidations and failures among firms such as Celsius and Three Arrows Capital, the market has been licking its wounds.
Nexo declined to disclose the size of its 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 company said the deal would also help Nexo expand its footprint in the U.S. “We already have a robust offering with regard to our crypto-backed loans but we always like to have more than one option for providing a particular service,” Antoni Trenchev, co-founder of Nexo, told CNBC. “The acquisition of a stake in a full-fledged bank enables us to offer our complete range of services to U.S. retail and institutional clients, including bank accounts, asset-backed loans, card programs, as well as escrow and custodial solutions, and many other future plans for Nexo’s U.S. expansion that will be uncovered in the months to come.”