Nexo Disabling Withdrawals Forcing Token Sale

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Nexo Logo/Website

Nexo, a London-based crypto exchange, is alleging to have prevented three tech entrepreneurs—brothers Jason and Owen Morton and their cousin Shane Morton from withdrawing over $126 million worth of cryptocurrencies and coerced them into selling their assets at a 60% discount. The investors claim that Nexo froze their accounts after expressing concerns about the exchange's transparency and then pressured them into selling Nexo Tokens back to the company. The lawsuit alleges breach of contract, claiming that Nexo imposed "bespoke" withdrawal limits and intimidated the investors into selling tokens below market value. A High Court lawsuit against Nexo was filed. Nexo responded, stating that all transactions were completed in good faith and considered the claim opportunistic as the events occurred in March 2021.

This is a global/international case not involving a specific country.

About Nexo

Nexo is a comprehensive digital asset platform that empowers individuals, businesses, and institutions to build and manage wealth in the crypto economy. Since its founding in 2018, Nexo has grown to manage over $11 billion in assets and operate in more than 150 jurisdictions. The platform offers a full suite of services from crypto savings and trading to credit lines, debit/credit cards, and private wealth solutions—all accessible through a single, streamlined app.

At its core, Nexo provides flexible and fixed-term savings options that allow users to earn daily compound interest—up to 16% annually—on a wide range of digital assets including BTC, ETH, USDT, and fiat-pegged stablecoins. For those seeking more active strategies, Nexo also offers Dual Investment products and high-leverage futures trading.

The platform goes beyond personal finance, supporting credit-backed liquidity solutions through crypto-collateralized loans, starting at just 2.9% interest. It also features the Nexo Exchange, where users can trade over 100 cryptocurrencies and set automated recurring buys. The Nexo Card enables real-time spending in both debit and credit modes, allowing users to earn up to 2% cashback without selling their crypto.

For high-net-worth individuals and corporate clients, Nexo Private delivers tailored wealth management, OTC trading, and customized credit services for portfolios starting at $100,000. Businesses can also build digital treasuries with institutional-grade security and 24/7 white-glove support.

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Nexo Disabling Withdrawals Forcing Token Sale

Date	Event	Description
March 22nd, 2021	Withdrawal Limit	A withdrawal limit of $150,000 is imposed without warning.
March 23rd, 2021	Withdrawals Blocked	Withdrawals of the Nexo token are blocked entirely.
September 29th, 2022	Case Filing	A case is filed against Nexo in the matter.
November 11th, 2022	Nexo Issues Response	Nexo issues a response on their blog. "Inevitably, spot trades of large blocks of crypto-assets can involve higher spreads. However, all transactions, including the sale of their Nexo tokens, were completed in good faith, were documented and were accepted as final by the claimants at execution. Having made substantial profits from trading their Nexo tokens, the claimants withdrew all their assets from the Nexo platform and they are not disputing this fact."
November 21st, 2022 3:26:12 AM MST	CityAM Article	CityAM publishes an article on the matter.
December 12th, 2022	Nexo Files Defense	Nexo files a defense in the lawsuit.
December 12th, 2024 8:20:00 PM MST	Concerns Not Addresses	The Mortons claimed they initially informed Nexo about their concerns in December 2020 but received an unsatisfactory response.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $58,350,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

The total amount recovered is unknown.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.