By acquiring a stake in the holding company that owns Summit National Bank, Nexo plans to expand its financial product offerings in the United States.
Digital asset lending platform Nexo has purchased a stake in a holding company that owns a federally chartered bank in the United States — a move Nexo said will enhance its ability to serve retail and institutional clients.
Nexo disclosed Tuesday that it had acquired a stake in Hulett Bancorp, a holding company that owns the federally chartered Summit National Bank, which is regulated by the Office of the Comptroller of the Currency. The terms of Nexo’s acquisition and its ownership stake in Hulett Bancorp were not revealed.
The acquisition gives Nexo and its customers the ability to open bank accounts with Summit National Bank. U.S.-based retail and institutional clients of Nexo will also have access to asset-back loans, card products, and escrow and custodial solutions offered through Summit.
Founded in 1984, Summit National Bank was originally chartered in Wyoming as Hulett National Bank. The financial institution has four locations across Montana and Idaho.
Big banks spent years calling Bitcoin and crypto a scam. But now they believe crypto is a "maturing asset class" similar to the internet in the mid-1990s. CT Business Editor @forgeforth_ has the scoop. https://t.co/RHgI3qlrNb— Cointelegraph (@Cointelegraph) February 11, 2022
As part of the new business relationship, Nexo co-founder and managing partner Kalin Metodiev will serve on Summit National Bank’s board. Forrest Gilman, who chairs Summit’s board, said Nexo will help transform the bank “into a fully-fledged fintech bank.”
When asked about the process of acquiring an ownership stake in Hulett Bancorp, Tatiana Metodieva, Nexo's head of corporate finance and investments, told Cointelegraph that "the deal was nearly two years in the making," adding that her team "conducted talks with multiple other institutions before selecting Summit National Bank as a prudent investment and partner."
Metodieva also explained that the acquisition gives Nexo new "fintech capabilities" as it expands in the United States:
"Nexo is looking to reach new clients and expand its addressable market in the U.S. through new fintech capabilities such as the ones we have the potential to develop with Summit National Bank. We will be unveiling more of our future plans for Nexo’s US expansion in the months to come."
Nexo has prioritized acquisitions as a way to strengthen its position amid the bear market. As reported by Cointelegraph, the firm hired Citibank in June to advise on how to acquire struggling crypto firms. At the time, the company said it believed the “crypto space is about to enter a phase of mass consolidation” following the implosion of major lending platforms.
By acquiring a stake in Hulett Bancorp, Nexo has signaled that it wants to expand its regulated crypto offerings and attract new users from traditional finance. This comes at a time when several states have pursued legal action against the crypto lender for allegedly failing to register its interest accounts.