California regulators have fined Nexo $500,000 for providing thousands of unlicensed crypto-backed loans. The action adds to a series of enforcement measures against the company's U.S. operations.
The California Department of Financial Protection and Innovation stated that an examination revealed Nexo Capital Inc., part of the broader Nexo group based in the Cayman Islands, issued consumer and commercial loans to at least 5,456 California residents without a valid state lending license. Regulators also noted the company failed to assess borrowers' ability to repay, existing debt levels, or credit history.
"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, this conduct took place between July 2018 and November 2022. Nexo expanded its crypto-backed lending business during this period before exiting the U.S. market amid increasing pressure from state and federal regulators. Since withdrawing, the company has discontinued traditional lending products for U.S. customers, maintaining crypto-backed borrowing services only outside the country.
The latest penalty follows previous clashes with California authorities. In 2023, the DFPI co-led a multistate task force that reached a $22.5 million settlement with Nexo over its unregistered Earn Interest Product. That same year, the U.S. Securities and Exchange Commission charged Nexo with failing to register its crypto lending offerings, imposing an additional $22.5 million penalty, bringing the firm's total U.S. fines in 2023 to $45 million.
Despite these regulatory setbacks, Nexo has continued international expansion and high-profile marketing efforts, including a multi-year sponsorship deal with the Australian Open.
In April last year, Nexo announced plans to reenter the U.S. market. The announcement came during a high-profile event in Sofia, Bulgaria, on a Sunday, where Donald Trump Jr. was the featured speaker. The conference, titled "Trump Business Vision 2025" and hosted by Nexo, gathered leaders from finance and technology to discuss global market trends.
The company's decision to return coincides with a shift in Washington's stance toward digital assets under President Trump's administration. Since taking office, President Trump has promoted a more crypto-friendly regulatory environment, pausing SEC lawsuits against crypto firms and easing banking guidelines related to digital assets. The Trump family is expanding its presence in the crypto space through World Liberty Financial, where Trump Jr. serves as an ambassador.
Describing a "tectonic shift" in U.S. crypto policy, Trenchev emphasized that real progress is underway to position America as a hub for digital finance.