The world’s biggest cryptocurrency lender Nexo is being sued by a California resident for suspending XRP payments back in December. Nexo was among the first firms to cut ties with XRP after the SEC launched its lawsuit against Ripple. The plaintiff, Junhan Jeong, is now pursuing legal action against Nexo for this “intentional and unjustified” suspension that led to $5 million in damages.
Nexo Acted In Bad Faith
On December 22 last year, the SEC filed a lawsuit against payments firm Ripple for conducting illegal sales of the XRP cryptocurrency. The price of the cryptocurrency dropped from $0.45 to ~$0.21 in the span of hours. Nexo rushed to suspend XRP payments and then proceeded to sell huge amounts of its customers’ funds — subsequently keeping the proceeds to itself.
According to documents submitted on April 1 in a California court, Jeong alleges that Nexo did not notify its customers of the suspension of XRP payments on phone or email. Jeong, who had taken a fiat loan from Nexo using XRP as the collateral alongside hundreds of other customers were obstructed from sustaining their loan-to-value (LTV) ratio which spurred a cascade of liquidations. To put it simply, this suspension implied that customers could not repay their loans using XRP or even use the asset as collateral.
The lawsuit claims that Jeong lost his collateral consisting of approximately 598,384.6188 XRP valued at $269,300. It further describes the liquidation of customers’ collateral as “unlawful”, countering Nexo’s statement back in December that says it was entitled to act as it …
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