Earlier this year, a Nexo trading platform client named JunHan Jeong posted an article titled "Please do not use NEXO". The client accused the exchange of suddenly and without warning changing the terms of its loan XRP and prevent him from maintaining his loan-to-value (LTV) ratio. Jeon called the action fraudulent and harmful. The client has now sued Nexo.
According to a document filed in the District Court for the Northern District of California, a class action lawsuit has been filed against Nexo Financial LLC and 3 of its subsidiaries. In the lawsuit, Jeon acts on her behalf and on behalf of others in a "similar" situation.
A side effect of the lawsuit against Ripple
Jeon recounted her version of events in the reference article. After the SEC sued Ripple, Nexo was quick to suspend the ability to repay loans with XRP. Jeon claims that Nexo based its decision to suspend XRP trading solely on the token's price drop. The lawsuit accuses Nexo of violating its terms and conditions:
As for the hundreds of Nexo clients that could have used XRP to maintain their LTV ratios, Nexo's material breaches deprived them of the benefit of their trading and excused any obligation to maintain their LTV ratios, either by posting more digital assets as collateral or the payment of your loans.
The plaintiffs are demanding compensation for their liquidated funds and for preventing them from maintaining their LTV by suspending XRP trading while Nexo was still evaluating the implications of the lawsuit against Ripple. The lawsuit says:
Therefore, Nexo's suspension of XRP payments and the liquidation of the collateral of these clients were illegal, and these clients are entitled to recover the value of their XRP when Nexo suspended their use and the value of their collateral liquidated by default (minus amounts outstanding on loan on that collateral).
In addition, the plaintiffs are demanding that Nexo desist from engaging in similar conduct in the future and a court order preventing the platform from changing the terms of its Nexo Crypto Credit product without the knowledge of its client.
In particular, Jeong claims to have lost 598,000 XRP estimated at $ 269,300 at the time. Also, he used 47,000 XLM, 0.009 BTC, 168 LINK and 6.16 ETH to meet its loan obligations valued at $ 169,400. The lawsuit says:
If Nexo acquires "ownership" of the crypto assets that Nexo's clients post as collateral, this would be an extremely unfair outcome that unreasonably favors Nexo over its clients and that results from Nexo's client's lack of reasonable choice or bargaining power. about the terms. and conditions that Nexo imposes on clients without any negotiation.