TechFlow news, January 16 — According to Cointelegraph, crypto lending firm Nexo Capital has been fined $500,000 by the California Department of Financial Protection and Innovation (DFPI) for issuing loans to California residents without proper licensing and for failing to adequately assess borrowers’ repayment capabilities. The DFPI stated that between July 2018 and November 2022, Nexo issued at least 5,456 consumer and commercial loans to California residents without holding a valid license.
Regulators noted that Nexo typically did not evaluate borrowers’ ability to repay on time, existing debts, credit history, or other relevant financial documents prior to issuing loans. This lack of comprehensive loan underwriting policies increased the risk of borrower default. Under the settlement agreement, Nexo must transfer all funds from California residents to its U.S. subsidiary, Nexo Financial LLC—which holds a California finance lender license—within 150 days.
