Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-01101
Institutional lockout — exchange custody (2023)
ConstrainedCase description
Nexo, a crypto lender, reached a $45 million settlement with a coalition of US state regulators in January 2023 after being accused of operating illegally as an unregistered securities dealer. As part of the settlement, Nexo ceased offering its Earn Interest product to US customers. US-based Nexo customers who had assets in the interest-bearing product were required to withdraw within 90 days or face transition to a non-interest account. While not an outright block, the forced product wind-down constrained holders who had structured their holdings around the continued availability of the product.
Custody context
| Stress condition | Vendor lockout |
| Custody system | Exchange custody |
| Outcome | Constrained |
| Documentation | Unknown |
| Year observed | 2023 |
| Country | United States |
Structural dependencies observed
What this illustrates
Before anyone could access the funds, a legal process had to be completed first. Whether full access was ultimately possible is unclear, but significant delay or outside intervention was involved.
Outcome interpretation
Access remained possible, but only with delay, dependence, or significant difficulty.
Source
Publicly Reported
Evidence type
News article
Related cases involving vendor lockout
This archive documents observed custody survivability failures. It does not attempt to document all Bitcoin losses or security incidents.
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Framework references
Where Bitcoin Custody Intersects Legal and Fiduciary Authority
Where custody creates gaps in estate planning, fiduciary duty, and professional responsibility.
Professional Scope Boundary Matrix
What each professional or product covers, what they do not, and where gaps form between them.
The Independent Assessment Layer in Bitcoin Custody
How independent diagnostic layers emerge when multiple parties depend on shared infrastructure.
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