Crypto lending company Nexo Capital will pay a $500,000 to California\u2019s financial regulator over allegations it issued thousands of loans to state residents without properly assessing their ability to repay.<\/p>\n
The California Department of Financial Protection and Innovation (DFPI) said<\/a> on Wednesday that Nexo made at least 5,456 consumer and commercial loans to Californians without a valid license.<\/p>\n \u201cBefore making a loan, Nexo Capital generally did not evaluate the borrower\u2019s ability to make timely repayments, existing debt, credit history, or other documents relating to the borrower\u2019s overall financial condition,\u201d the regulator said.<\/p>\n DFPI Commissioner KC Mohseni said lenders \u201cmust follow the law and avoid making risky loans that endanger consumers \u2014 and crypto-backed loans are no exception.\u201d<\/p>\n Crypto-backed loans allow users to borrow fiat or stablecoins by posting digital assets as collateral.\u00a0<\/p>\n While typically overcollateralized and easier to access than traditional credit, often without credit checks, missed repayments can trigger the forced sale of collateral to cover outstanding balances.<\/p>\n The DFPI claimed that Nexo had a \u201clack of underwriting policies\u201d that heightened the risk of borrowers defaulting on their loans.<\/p>\n The DFPI said the loans were issued between July 2018 and November 2022 and involved \u201cunlawful acts and practices\u201d related to a consumer product or service that failed to comply with consumer financial laws.<\/p>\n Related: <\/strong><\/em>US lawmakers demand action from SEC on Justin Sun enforcement case<\/strong><\/em><\/a><\/p>\n Within 150 days, Nexo must transfer all California residents\u2019 funds to Nexo Financial LLC, a US-based affiliate that holds a California Finance Lenders License with the DFPI.<\/p>\n <\/template><\/p>\n In February 2023, the company said it would end its yield-bearing Earn Interest product for its US customers, roughly a month after it agreed to pay $45 million<\/a> in penalties to US regulators.<\/p>\n The program allowed users to earn daily compounding yields on certain cryptocurrencies by loaning them to Nexo.<\/p>\n Magazine: <\/strong><\/em>Here\u2019s why crypto is moving to Dubai and Abu Dhabi<\/strong><\/em><\/a><\/p>\n <\/template><\/div>\n Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph\u2019s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https:\/\/cointelegraph.com\/editorial-policy<\/a><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":" California\u2019s finance watchdog claims Nexo made nearly 5,500 loans to Californians without a valid license and did not properly assess […]<\/p>","protected":false},"author":5,"featured_media":59554,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[220],"tags":[],"class_list":["post-59553","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tien-dien-tu"],"acf":[],"_links":{"self":[{"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/posts\/59553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/comments?post=59553"}],"version-history":[{"count":0,"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/posts\/59553\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/media\/59554"}],"wp:attachment":[{"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/media?parent=59553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/categories?post=59553"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hbbgroup.net\/zh\/wp-json\/wp\/v2\/tags?post=59553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}DFPI says Nexo loans at increased risk of default<\/h2>\n
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2026-01\/019bc47c-2d17-7bb5-8827-35a28f9a772a.png\")