Author: Joe L. White, Jr.
Date: July 01, 2025
Reference: Conciliation Request – Nexo AG, Canton of Zug
Purpose
To highlight how Nexo AG’s platform and practices simulate deposit-taking activity subject to banking licensure, creating potential exposure under the Swiss Banking Act (BankG) and undermining protections for individual investors. This annex is submitted in support of the broader claim of regulatory evasion and potential unlawful financial intermediation.
Factual Background
From 2020 through early 2022, I used Nexo AG’s platform as a secure location to store and earn passive yield on digital assets. The user experience, branding, and product descriptions all conveyed the safety, predictability, and protections of a licensed banking relationship. Key features included:
- Prominent marketing slogans describing Nexo as “the world’s first crypto bank.”
- Instant asset deposits and withdrawals, interest-bearing savings functionality, and fiat/stablecoin access.
- Language invoking custodial and fiduciary responsibility.
- Automated credit line services resembling overdraft functionality, linked to deposited collateral.
At no point was I informed that Nexo AG lacked a Swiss banking license. No warnings were provided indicating that deposited assets were exposed to lender default, custodial risk, or re-use (rehypothecation) without client-level protections.
Claimant Perspective
As a retirement-age client with prior U.S. financial licensing, I was deeply misled by the banking-like interface and terminology used by Nexo. In the United States, where I reside, these practices would have clearly required registration or licensure. My decision to transfer assets to Nexo was predicated on the good-faith belief that they operated as a regulated, safe financial intermediary.
Instead, Nexo AG operated in a legal gray zone, soliciting deposits without banking supervision and exposing clients to concealed risk. These are not mere branding issues; they speak to the fundamental legal character of Nexo’s business.
Supporting Evidence or Reasoning
- Key Marketing Phrases (Public Materials, 2020–2022):
- “Bank-grade security and custodial protection”
- “Your crypto bank account”
- “Deposit, earn, borrow, and spend—all in one place”
- Swiss Banking Act (BankG):
- Art. 1: Entities engaging in commercial acceptance of deposits from the public are considered banks.
- Art. 3: Operating as a bank requires a license from FINMA.
- Interpretation: The absence of clear disclaimers or segmentation from regulated services suggests de facto deposit-taking behavior.
- FINMA Guidance on Crypto Finance (2019):
- Differentiates between custody-only services and services that commingle or reuse client assets.
- Notes that yield-bearing deposit structures are presumed banking unless exempted.
- Case Law Relevance:
- Swiss precedent has recognized that branding, product structure, and client experience are relevant in assessing whether deposit-taking behavior has occurred.
- In re ICO proceedings (2019), FINMA emphasized that investor expectations and platform representations can trigger licensure obligations.
Systemic Implication
Nexo’s design choices indicate an intent to simulate banking behavior without accepting the regulatory burden of being a bank. This regulatory arbitrage places clients at significant risk while shielding the platform from oversight. As Nexo targets high-net-worth individuals and institutional partnerships, this issue becomes exponentially more dangerous.
Statement of Intent
This annex is submitted in support of a good-faith civil conciliation request under ZPO Art. 202–204. The claimant asserts that the conduct described herein warrants regulatory attention and damages due to misrepresentation and unsupervised financial intermediation. No proprietary platform information is disclosed, and all references are based on claimant usage, public materials, and industry guidelines.
Disclaimer
This document is submitted in good faith, based solely on the claimant’s personal experience and publicly available facts. No confidential or privileged information has been disclosed. All statements reflect the claimant’s beliefs or recollections unless otherwise indicated. Names of third parties are anonymized or redacted where not publicly implicated. The purpose of this release is transparency, accountability, and resolution not defamation or harm.
Legal Context Note
This annex was authored solely by the claimant as part of a lawful civil conciliation filing under Articles 202–204 of the Swiss Civil Procedure Code (ZPO). It does not contain any confidential statements made during the conciliation hearing, nor does it disclose settlement terms or other protected materials governed by ZPO Art. 205.
The annex is based exclusively on:
- Personal experience,
- Publicly available information, or
- Facts the claimant is legally entitled to share.
Its purpose is to document the legal and factual basis for the claimant’s grievance, promote transparency, and serve the public interest where legal oversight may be insufficient.
The annex adheres to Swiss privacy and defamation standards under ZGB Art. 28, the Data Protection Act (DSG), and applicable banking/professional secrecy provisions (BankG, StGB Art. 321).
It is not an official court document, and no information disclosed herein was obtained through the hearing process.