Nexo was sued for triggering over $5 million in damages due to the ‘illegal’ termination of XRP fees.

Nexo, a cryptocurrency loan company headquartered in the United Kingdom, has been sued for reportedly causing over $5 million in damages by halting XRP payments in December of last year. This came after the SEC suspected Ripple of conducting an unlawful securities offering. Plaintiff Junhan Jeong, a California native, filed the class-action case on behalf of other XRP users who incurred losses as a result of Nexus’ ruling. The following is mentioned in the filing:

“Plaintiff seeks redress for the nationwide harm resulting from Nexo’s intentional and unjustified suspension on December 23, 2020, of a critical repayment option on its platform for using crypto assets to borrow cash and from the resulting liquidation of the collateral of hundreds of Nexo customers, causing well over $5 million in damages.”

Following the SEC’s lawsuit against Ripple in December of last year, several crypto service providers, including exchanges, agreed to remove XRP from their websites.

The most recent filing, on the other hand, accused Nexo of forbidding consumers from keeping “their LTV ratios and then punishing them for failing to retain their LTV ratios.”

Customers who should have “used XRP to post as supplementary collateral” or to pay off their debts “were unable to do so,” according to the complainant.

“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 collateral as of breach (less the outstanding loan amounts on that collateral).”

Nexo has also been accused of allegedly liquidating collateral and pocketing the proceeds. The complaint also listed Nexo’s inability to give notice of its termination of XRP fees, which “also represented unconstitutional and unjust commercial actions and practises” under California law.

Plaintiff Junhan Jeong claimed that he had lost his collateral of 598,384.6188 XRP, which was valued at approximately $269,300.

 

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