Nexo AG’s Cayman Loophole — And Why FINMA’s Silence Is the Real Scandal - Case 2025-000001

Switzerland’s reputation as the gold standard for financial integrity is being quietly traded away — and the deal is being brokered not by a rogue company, but by its own financial watchdog, FINMA. The case of Nexo AG exposes how a Cayman Islands corporate structure, paired with a Zug-based presence, is allowing potentially predatory practices to flourish on Swiss soil with the full prestige of the Swiss name — yet without Swiss law truly applying.

The Loophole That Shouldn’t Exist

Nexo AG operates in Switzerland but is incorporated in the Cayman Islands. This design is no accident. By placing its corporate headquarters in a jurisdiction known for minimal corporate disclosure and limited oversight, Nexo enjoys the benefits of operating in the heart of Europe without being bound by Switzerland’s strict corporate governance rules. The Zug office confers the aura of Swiss credibility; the Cayman incorporation acts as a shield against meaningful Swiss regulatory intervention.

The result? A company that can attract investors under the halo of Swiss trust while evading the very laws and accountability that halo implies.

The Consequences for Investors

This isn’t just a matter of legal technicalities — it has real human costs. Nexo AG has been implicated in placing retirement-age investors’ lifetime savings into high-risk investment structures subject to forced liquidation. For a retiree, this is catastrophic: once liquidated, there is no time to reaccumulate wealth before death. The losses aren’t theoretical; Swiss courts have already issued judgments in similar cases where Nexo harmed older investors.

Yet even with that track record, Nexo continues to operate. Investors are lured by the promise of Swiss stability, unaware that if something goes wrong, they may find themselves with no enforceable Swiss protections.

FINMA’s Choice, Not FINMA’s Blind Spot 

It is tempting to believe that FINMA — the Swiss Financial Market Supervisory Authority — is simply unaware of the gap. But this is no oversight. The jurisdictional loophole is well known, and FINMA has the tools to close it or at least to issue public warnings. A single directive, a clarified licensing requirement, or a public advisory could significantly curtail the risk.

Instead, FINMA remains silent. This silence is not neutral; it actively enables companies like Nexo to keep operating with impunity. By failing to act, FINMA is not a bystander — it is a participant in the harm.

A Pattern, Not an Accident

This is not a one-off misstep by Nexo. At least two prior Swiss judgments have found Nexo liable for harming retirement-age investors in situations eerily similar to current complaints. The pattern is clear, the harm is predictable, and yet the doors remain open for repeat offenses.

Why? Because the Cayman–Zug model offers a safe harbor: a prestigious Swiss address to reassure investors, with foreign incorporation to shield against domestic accountability.

A Wake-Up Call to Investors

If you are a Nexo customer, you need to understand the stakes. You are not dealing with a fully regulated Swiss financial institution bound by Swiss investor protection laws. You are dealing with an entity that appears Swiss for marketing purposes but answers to a different legal system — one that offers you far fewer rights. 

If there is a dispute, you may have to fight your case in a foreign jurisdiction with unfamiliar laws, higher costs, and lower chances of recovery. By the time you realize this, it may be too late.

The Call to Action

FINMA’s mandate is to safeguard Switzerland’s financial stability and protect market participants. Allowing foreign-incorporated companies to leverage Swiss branding while escaping Swiss oversight violates both the spirit and the letter of that mission. The public has a right to expect better.

It is time for:

● Immediate regulatory review of all foreign-incorporated financial firms with a Swiss presence.

● Public advisories warning investors about jurisdictional risks.

● Legislative tightening to ensure Swiss branding can only be used by entities fully subject to Swiss law.

The Swiss public, political leaders, and the media must demand this change. Until then, companies like Nexo AG will continue to profit from the gap — and FINMA will remain complicit in every future loss.