California Fines Crypto Asset Manager Nexo $500,000 for Operating Unlicensed Lending//}}

BlockBeats News, January 16th, the California Department of Financial Protection and Innovation (DFPI) announced that it has fined the cryptocurrency asset management platform Nexo $500,000 for providing cryptocurrency asset-backed loans to at least 5,456 California residents without obtaining a state-level license.

The regulator stated that its investigation found that Nexo's subsidiary, Nexo Capital Inc. (registered in the Cayman Islands), had issued loans to consumers and businesses from July 2018 to November 2022 without a valid license, and had not assessed borrowers' ability to repay, existing debt, or credit history before lending, violating California's relevant financial regulations.

DFPI Commissioner KC Mohseni said, "Lending institutions must comply with the law, avoiding issuing high-risk loans that endanger consumers, and cryptocurrency-backed loans are no exception." In addition to the fine, Nexo has been instructed to transfer all California user funds to a licensed U.S.-affiliated entity within 150 days.

This penalty comes as Nexo announces plans to reenter the U.S. market. The company had previously exited the U.S. in 2022 under state and federal regulatory pressure. Earlier, in 2023, Nexo reached a total of $45 million in settlements with the U.S. Securities and Exchange Commission (SEC) and multiple state regulators for unregistered cryptocurrency lending and yield products.

Analysts point out that this case once again highlights the ongoing high-pressure stance of U.S. regulatory agencies on the compliance of cryptocurrency lending businesses, especially in terms of consumer protection and lending reviews. Nexo has not yet publicly responded to this matter.