Nexo has been fined $500,000 by California regulators for issuing thousands of unlicensed crypto-backed loans, adding to a growing list of enforcement actions that have followed the company’s operations in the United States.
Key Takeaways:
California fined Nexo $500,000 for issuing unlicensed crypto-backed loans to thousands of residents. Regulators ordered Nexo to move all California customer funds to a licensed US affiliate within 150 days. The action adds to Nexo’s growing list of US penalties over compliance failures in crypto lending.The California Department of Financial Protection and Innovation said an examination found that Nexo Capital Inc., a Cayman Islands–based entity within the broader Nexo group, provided consumer and commercial loans to at least 5,456 California residents without holding a valid state lending license.
Regulators also said the company failed to assess borrowers’ ability to repay, existing debt levels or credit history.
California Orders Nexo to Move Customer Funds After Lending Fine
“Lenders must follow the law and avoid making risky loans that endanger consumers — and crypto-backed loans are no exception,” DFPI Commissioner KC Mohseni said in a statement announcing the penalty.
In addition to the fine, Nexo has been ordered to transfer all funds belonging to California residents to a licensed U.S. affiliate within 150 days.
According to the DFPI, the conduct occurred between July 2018 and November 2022, a period during which Nexo expanded its crypto-backed lending business before exiting the US market amid mounting pressure from state and federal regulators.
Since withdrawing, the company has shuttered its traditional lending products for US customers, continuing crypto-backed borrowing services only outside the country.
The latest penalty marks another clash between Nexo and California authorities. In 2023, the DFPI co-led a multistate task force that reached a $22.5 million settlement with the company over its unregistered Earn Interest Product.
That same year, the US Securities and Exchange Commission charged Nexo with failing to register its crypto lending offerings, imposing an additional $22.5 million penalty and bringing the firm’s total US fines in 2023 to $45 million.
Industry observers say the findings raise broader questions about compliance standards in crypto lending.
Despite the regulatory setbacks, Nexo has continued to pursue international expansion and high-profile marketing efforts, including a multi-year sponsorship deal with the Australian Open.
Nexo Signals US Comeback at Event Featuring Donald Trump Jr.
In April last year, Nexo also revealed plans to reenter the U.S. market, marking a significant comeback.
The announcement came during a high-profile event in Sofia, Bulgaria, on Sunday, where Donald Trump Jr. was the featured speaker.
The conference, titled “Trump Business Vision 2025” and hosted by Nexo, brought together leaders from finance and technology to discuss global market trends.
The company’s decision to return coincides with a notable shift in Washington’s stance toward digital assets under President Trump’s administration.
Since taking office, President Trump has championed a more crypto-friendly regulatory environment, pausing SEC lawsuits against crypto firms and easing banking guidelines related to digital assets.
The Trump family itself is expanding its footprint in the crypto space through World Liberty Financial, where Trump Jr. serves as an ambassador.
Describing a “tectonic shift” in US crypto policy, Trenchev emphasized that real progress is underway to position America as a hub for digital finance.
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