California Fines Nexo $500K Over Unlicensed Crypto Loans
California regulators have imposed a $500,000 penalty on Nexo for issuing unlicensed crypto-backed loans to thousands of residents. The Cayman Islands-based entity, Nexo Capital Inc., provided loans to at least 5,456 Californians without proper licensing, according to the Department of Financial Protection and Innovation.
Regulators found Nexo failed to assess borrowers' repayment capacity, debt levels, or credit history. "Lenders must follow the law and avoid making risky loans that endanger consumers — and crypto-backed loans are no exception," said DFPI Commissioner KC Mohseni.
Nexo has been ordered to transfer all California customer funds to a licensed U.S. affiliate within 150 days. This enforcement action adds to the company's growing list of U.S. regulatory penalties related to crypto lending compliance failures.
