California regulators have fined crypto lender Nexo $500,000 for issuing thousands of crypto-backed loans without the proper state license, adding to a growing list of enforcement actions the company has faced in the U.S.
Key Takeaways:
California fined Nexo $500,000 for offering unlicensed crypto-backed loans to thousands of residents.
Regulators ordered the company to move all California customer funds to a licensed U.S. affiliate within 150 days.
The penalty adds to Nexo’s expanding record of compliance violations tied to crypto lending in the U.S.
The California Department of Financial Protection and Innovation (DFPI) said its review found that Nexo Capital Inc., a Cayman Islands–based unit of the Nexo group, issued consumer and commercial loans to at least 5,456 California residents without holding a valid state lending license.
Regulators also said Nexo failed to properly evaluate borrowers’ ability to repay, including reviewing their existing debts or credit history.
Regulators Order Fund Transfers
“Lenders must follow the law and avoid making risky loans that put consumers at risk—and crypto-backed loans are no exception,” DFPI Commissioner KC Mohseni said in a statement.
Beyond the fine, California ordered Nexo to transfer all funds belonging to state residents to a licensed U.S. affiliate within 150 days.
According to the DFPI, the violations occurred between July 2018 and November 2022, a period when Nexo rapidly expanded its crypto lending business before pulling out of the U.S. under increasing regulatory pressure.
Since exiting the market, Nexo has shut down its traditional lending products for U.S. customers and now offers crypto-backed borrowing only outside the country.
A Pattern of US Enforcement
The latest action marks yet another run-in between Nexo and U.S. regulators. In 2023, California helped lead a multistate task force that reached a $22.5 million settlement with the company over its unregistered Earn Interest Product.
That same year, the U.S. Securities and Exchange Commission also charged Nexo for failing to register its crypto lending offerings, imposing an additional $22.5 million penalty. Together, those cases brought Nexo’s U.S. fines in 2023 to $45 million.
Industry watchers say the findings highlight broader concerns around compliance standards in crypto lending.
Expansion Abroad, Hints at a US Return
Despite ongoing regulatory challenges, Nexo has continued to expand internationally and invest in high-profile marketing, including a multi-year sponsorship deal with the Australian Open.
In April last year, the company signaled plans to return to the U.S. market during a high-profile event in Sofia, Bulgaria, where Donald Trump Jr. appeared as the featured speaker.
The conference, titled “Trump Business Vision 2025,” was hosted by Nexo and brought together leaders from finance and technology to discuss global market trends.
Nexo’s potential return comes as Washington’s stance on crypto appears to be shifting under President Trump’s administration, which has moved toward a more crypto-friendly approach—pausing some SEC lawsuits and easing banking restrictions tied to digital assets.
The Trump family has also expanded its presence in the crypto industry through World Liberty Financial, where Trump Jr. serves as an ambassador.
Calling the policy shift “tectonic,” Nexo co-founder Antoni Trenchev said the company believes real momentum is building to position the U.S. as a global hub for digital finance.
