In a blog post published on Dec. 5, the crypto lending and borrowing platform Nexo stated that it would gradually stop operating in the U.S. "over the coming months." According to Nexo, the decision was "regrettable but necessary."

The platform's Earn Interest product in the U.S. has been suspended following the off-boarding of consumers from New York and Vermont by Nexo. The Earn Interest program will also no longer be available to current clients after Dec. 6 in eight additional states.

Nexo said in the post that it had been in discussions with U.S. regulators for 18 months in an effort to figure out how to abide by U.S. financial rules. However, no agreement between the firm and US officials has emerged from these discussions.

"Our decision comes after more than 18 months of good-faith dialogue with US state and federal regulators which has come to a dead end," the company said. "It is now unfortunately clear to us that despite rhetoric to the contrary, the U.S. refuses to provide a path forward for enabling blockchain businesses and we cannot give our customers confidence that regulators are focused on their best interests."

Existing clients from other states will continue to have access to the product for the time being.

Because of the strong relationships between previous CEO Sam Bankman Fried and officials, the role of regulators has been widely studied in the aftermath of FTX's collapse. According to some reports, eight congresspeople, five of whom got FTX funds, attempted to prevent the Securities and Exchange Commission from investigating FTX.

Due to the number of parties involved, the regulatory process takes time, and every piece of legislation must be approved by Congress before it can be implemented. However, authorities such as the SEC can utilize court injunctions to set policies that safeguard their investors.

The continuing dispute between the agency and management of Ripple is an example of this. Despite the lack of clear standards about which crypto assets can be considered assets and which ones can be considered securities in this lawsuit, the SEC is employing legal tools to enforce the laws.

Due to their failure to safeguard investors from financial loss in the collapse of yet another billion-dollar company, regulatory organizations have come under fire following the collapse of FTX. In the future, it will be interesting to see how lawmakers and regulators approach the issues of jurisdiction, scope, and oversight in an effort to strengthen the crypto ecosystem.