Nexo Faces $500,000 Penalty from California for Unlicensed Loans
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 17 2026- Regulatory Penalty: California's Department of Financial Protection and Innovation imposed a $500,000 fine on Nexo for issuing loans to 5,456 customers without proper licensing, highlighting significant compliance failures that could hinder the company's plans to re-enter the U.S. market.
- Loan Compliance Issues: Nexo issued crypto-backed loans between July 26, 2018, and November 22, 2022, without conducting essential borrower repayment ability checks, indicating severe shortcomings in risk management that may expose consumers to financial risks.
- Customer Fund Transfer Requirement: In addition to the fine, Nexo must transfer all California customer funds to a properly licensed U.S. partner within 150 days, which will increase operational costs and potentially erode customer trust, further obstructing its market recovery.
- Uncertain Future Outlook: The timing of this penalty raises questions about Nexo's compliance capabilities as it seeks to return to the U.S. market, especially given California's status as the largest economy in the country, which could have far-reaching implications for its future development.
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.
