Crypto Lender Nexo Sued for "Unlawful" Suspension of XRP

Deepshikha  |  Apr 5, 2021

Cryptocurrency lender Nexo has been sued for the “unlawful” suspension of XRP payments, with a class-action lawsuit in late December. This has caused $5 million in damages.  

According to a document filed in the District Court Northern District of California, a class action has been filed against Nexo Financial LLC and 3 of its subsidiaries. In the lawsuit, Jeon is acting on behalf of himself and others in a “similar” situation.

Crypto Lender Doesn’t Qualify to sell XRP tokens

After the U.S. Securities and Exchange Commission sued blockchain company Ripple, Nexo runs off its feet to suspend the ability to repay loans with the affiliated XRP cryptocurrency

The lawsuit accuses the company of breaching its terms and conditions:

“As to the hundreds of Nexo customers who could have used XRP to maintain their LTV ratios, Nexo’s material breaches deprived them of the benefit of their bargain and excused any obligation to maintain their LTV ratios, whether by posting more digital assets as collateral or by paying down on their loans.”

The plaintiffs demand compensation for their liquidated funds and for preventing them from maintaining their LTV by suspending XRP trading while the crypto lender was still evaluating the implications of the lawsuit against Ripple. 

The lawsuit states:

“Nexo’s suspension of XRP payments and liquidation of these customers’ collateral, therefore, was unlawful, and these customers are entitled to recover the value of their XRP when Nexo suspended its use and the value of their liquidated collaterals of the breach (less the outstanding loan amounts on that collateral).”

Nexo Has Not Entitled Customers, Want to Recover Their Fund

According to the lawsuit the crypto lender was “not entitled” to liquidate the collateral of customers. If Nexo were to acquire the “ownership” of the crypto-assets, Nexo customers post as collateral. This would be extremely unfair which unreasonably favors Nexo over its customers. 

This Results in the crypto lender's customers' lack of reasonable choice or negotiating power over the terms and conditions which Nexo imposes on customers without any negotiation. 

The crypto lender's customers are seeking to revive the value of their XRP when the lender suspended its use. The individuals are entitled to the value of the digital assets taken from their Savings Wallets, the value of the digital assets or cash that they transferred to their Credit Line Wallets, and maintaining LTV ratios during the suspension of the customer. Any obligation to maintain those ratios had been excused.

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