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The California Department of Financial Protection and Innovation (DFPI) recently issued a $500,000 fine to the crypto lending platform Nexo. What’s going on?
According to the DFPI investigation, Nexo and its subsidiary Nexo Capital Inc. provided crypto asset-backed loans to at least 5,456 California residents from July 2018 to November 2022 without a state license. Even more concerning, the company did not assess borrowers’ repayment ability, debt situation, or credit history when issuing loans, directly violating California’s financial regulations.
DFPI Director KC Mohseni explicitly stated: "Lending institutions must play by the rules and not issue high-risk loans that harm consumers. Crypto-backed loans are no exception." In addition to the fine, Nexo is required to transfer all funds of California users to a licensed U.S. institution within 150 days.
Interestingly, this penalty coincides with Nexo’s announcement of plans to re-enter the U.S. market. Historically, Nexo was forced to exit the U.S. in 2022 due to regulatory pressure. Later, in 2023, the company reached settlement agreements totaling $45 million with the U.S. Securities and Exchange Commission (SEC) and multiple state regulators over unregistered crypto lending and yield products.
This case once again demonstrates that compliance is not an option but a necessity in both traditional finance and the crypto space.
How many people have been坑惨了, isn't this inviting trouble?
A 500,000 fine doesn't hurt at all; the key is that reputation is ruined.
Want to return to the US market? You need to settle this matter first.
Crypto still has to be honest and compliant, or you'll be cooled off sooner or later.
Another bloody lesson. Why can some people never learn?
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Want to enter the US market again, and immediately get fined. Serves you right.
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Over 5,000 people were scammed. How do you account for this?
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Is compliance really that difficult? Do you have to fail before you understand?
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Damn, the $45 million settlement fee still isn't enough to teach a lesson.
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California really cracked down this time. Other platforms, watch out.
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Lending without due diligence? Isn't that asking for trouble?
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Why do some people always try to bypass regulations? Do they really find it that troublesome?
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Transferring funds over 150 days, Nexo has been thoroughly dealt with.
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They haven't been investigated since 2018. The regulatory response is quite good.
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I'm telling you, platforms like this deserve to be fined.
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The US market isn't that easy to enter. Nexo has already proven that.