Nexo, a digital asset firm that describes itself as the “world’s leading regulated institution for digital assets,” has acquired an ownership stake in Hulett Bancorp (DBA Mode Eleven), the parent company of Summit National Bank.
Summit National Bank is a federally chartered financial institution. Terms of the deal and ownership percentage were not immediately available.
The news about Nexo’s purchase arrives at an interesting time as it was reported this week that Nexo is being sued by eight different states for alleged violations of state securities laws, including allowing non-accredited users in the US, to use Nexo’s Earn Interest Product.
In a corporate statement, Nexo said the deal would allow it to offer its US retail and institutional clients services that include bank accounts, asset-backed loans, card programs, as well as escrow and custodial solutions through Summit National Bank.
Nexo said that Summit National Bank is “reimagining itself and its offering to serve customers’ needs as a modern digital Fintech bank.”
Nexo reported that the partnership has been reviewed by the Office of the Comptroller of the Currency (OCC) as part of the general overhaul plan. Nexo did not reveal the status of the review.
Kalin Metodiev, co-founder and managing partner of Nexo has been appointed to the Summit National board of directors. Metodiev commented on the investment:
“This investment marks another landmark in Nexo’s relentless drive to better serve our US customers in compliance with the constantly evolving regulatory landscape. We care deeply about our customers and are thrilled that this development will grant them access to some of the most innovative products at the intersection of traditional finance and blockchain technology.”
Forrest Gilman, Chairman of the Board, and President of the bank said they are delighted to welcome Nexo aboard:
“We are excited to be partnering with Nexo as we combine Summit National Bank’s traditional strengths and values with our vision for the bank’s future. Kalin’s active engagement on the Board strengthens our work on the transformation of the bank into a fully-fledged cutting-edge FinTech bank with access to new clients.”
Nexo said its long-term plans include the expansion of its global commercial banking capabilities, both through the partnership with Summit National Bank and by securing additional banking licenses on a global scale.
Nexo reports that it serves more than 5 million customers in over 200 jurisdictions, having processed more than $100 billion since its inception.
Nexo currently holds over $4 billion in assets under management.