A family of fintech entrepreneurs is suing Nexo in London, alleging that it froze their ability to withdraw up to £107 million ($126 million) of their assets and then coerced them into selling it all to the crypto lender at a 60% discount.
According to City AM, brothers Jason and Owen Morton, as well as cousin Shane Morton, possessed millions in Nexo’s NEXO tokens, as well as tens of millions in Bitcoin and other cryptocurrencies.
They assert that they voiced their worries about Nexo’s compliance and transparency for the first time in December 2020. The following March, they started withdrawing some of their $126 million hoard after not receiving a response from the cryptocurrency lender. They sold their NEXO in increments to avoid affecting the price.
Nexo, on the other hand, implemented a $150,000 daily withdrawal limit on March 22, 2021. The Mortons claim their “withdrawal” buttons were greyed out the next day. They couldn’t convert their NEXO to other cryptocurrencies because the “convert” button was also locked.
They claim that when they spoke with the Nexo accounts manager who dealt with them, he told them that the measures were put in place to “maintain the price of Nexo Tokens.” He then allegedly offered them an impossible deal: they could sell their NEXO back to the exchange at a 60% discount.
According to the lawsuit, Nexo violated the terms of the agreement when it imposed “bespoke” withdrawal limits, and the lender’s subsequent negotiation strategies amounted to “intimidation.”
Nexo, for its part, issued a statement ten days ago calling the lawsuit “opportunistic” and arguing that “all transactions, including the sale of their Nexo tokens, were completed in good faith, were documented, and were accepted as final by the claimants at execution.”