Nexo Capital Fined $500,000 for Loan Violations in California
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 16 2026- Regulatory Fine: California regulators imposed a $500,000 fine on Nexo Capital for issuing loans to at least 5,456 Californians between 2018 and 2022 without assessing borrowers' repayment ability, significantly increasing default risk and jeopardizing consumer financial safety.
- Customer Fund Transfer: Due to Nexo Capital's lack of licensing in California, regulators mandated the transfer of all customer funds to its licensed U.S. affiliate, Nexo Financial LLC, ensuring compliance and protecting consumer interests.
- Compliance Policy Deficiencies: Nexo was criticized for lacking proper underwriting policies, which led to the issuance of crypto-backed loans without necessary credit checks or income verification, contradicting traditional financial compliance standards and potentially resulting in higher default rates.
- Past Legal Troubles: Nexo Capital faced regulatory scrutiny for not registering its Earn Interest Product as a security, resulting in a $45 million settlement, and subsequently ceased accepting new U.S. investors, highlighting ongoing compliance challenges.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
