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Crypto.com gives users in restricted countries one week to repay their crypto loans

March 9, 2022 By Benson Toti

Crypto.com is one of the leading crypto exchange platforms and a popular NFT marketplace.

Major cryptocurrency exchange platform Crypto.com has reportedly asked its users is several countries to repay their crypto loans within the next week.

Crypto.com’s notice to borrowers comes after it updated its list of countries where its lending service is unavailable. Per the updated list, major crypto markets such as the US, the UK and several others within the European Union.

The request, sent via email to affected users, applies to those who have outstanding loans but are currently within countries included in a list where the exchange’s loan program has been restricted.

According to details in one of the emails shared on Crypto Twitter, crypto loan holders have until 15 March to honour the request to repay. Users have been advised that failure to repay the loans by the stated deadline would force the platform to sell held collateral and automatically close the loan position.

Some users have raised complaints at the notice, especially with regard to the supposed withholding of information on the exchange’s part.

Regulatory compliance

Crypto.com appears to have taken this step amid recent regulatory scrutiny around crypto lending services. Earlier this year, the US Securities and Exchange Commission (SEC) began an investigation against crypto lending services at Gemini and Celsius.

In February, the SEC ordered BlockFi to pay a $100 million penalty for providing an unregistered lending product. The crypto firm agreed to pay the penalty and pursue proper registration as stipulated under the law within 60 days.

The SEC noted at the time that the case against BlockFi “was the first of its kind” in the crypto space. However, it gave notice to any other firm with similar operations.

Gurbir S. Grewal, the agency’s Division of Enforcement Director said:

"Crypto lending platforms offering securities like BlockFi’s BIAs should take immediate notice of today’s resolution and come into compliance with the federal securities laws."