California Slaps Nexo With $500K Fine Over Unlicensed Crypto Lending
California regulators have fined crypto lender Nexo $500,000 for operating without proper licensing and issuing risky loans to over 5,456 state residents. The enforcement action targets Nexo Capital Inc., a Cayman Islands-based entity that offered crypto-backed personal and business loans between 2018 and 2022 while bypassing standard underwriting checks.
"Lenders must follow the law and avoid making risky loans that endanger consumers—and crypto-backed loans are no exception," said KC Mohseni of the California Department of Financial Protection and Innovation. Nexo failed to verify borrowers' ability to repay, existing debts, or creditworthiness—standard practices for licensed lenders.
The penalty comes as Nexo attempts to re-enter the U.S. market. The company must now transfer all California customer funds to a licensed U.S. partner within 150 days.
