Nexo To Pay $500K Fine Over 'Risky' Crypto-Backed Loans
Nexo will pay a $500,000 fine to California's regulator for issuing thousands of risky crypto-backed loans without a proper license.Summary
Crypto lending company Nexo Capital agreed to pay a $500,000 fine to the California Department of Financial Protection and Innovation (DFPI) for issuing at least 5,456 consumer and commercial loans to Californians between July 2018 and November 2022 without a valid license. The DFPI alleged that Nexo generally failed to evaluate borrowers' ability to repay, lacking underwriting policies that increased the risk of default on these crypto-backed loans. DFPI Commissioner KC Mohseni emphasized that lenders must follow the law, even with crypto loans. As part of the settlement, Nexo must transfer all California residents' funds to its US-based affiliate, Nexo Financial LLC, which holds the required California Finance Lenders License, within 150 days.
(Source：Cointelegraph)