The California Department of Financial Protection and Innovation (DFPI) announced that it has fined the cryptocurrency wealth management platform, Nexo Inc., $500,000 to settle allegations concerning the sale of unregistered securities and operating without necessary state lending licenses.
The enforcement action focuses primarily on Nexo’s interest-earning products, where customers could deposit digital assets in exchange for high-yield returns. The DFPI alleged that these products constituted the offering and sale of unqualified securities under California law because they were not registered with the state regulator.
Furthermore, the DFPI found that Nexo was acting as an unlicensed lender in California by offering its crypto-backed loan products to residents without obtaining the required financing licenses, violating state provisions designed to protect consumers engaging in loan transactions.
Nexo agreed to the settlement, which includes the monetary penalty, without admitting or denying the findings. The agreement mandates that Nexo must cease and desist from offering these specific unregistered interest-earning products and unlicensed lending services to California residents unless and until it complies with all applicable state registration requirements.
Source: California Fines Crypto Wealth Platform Nexo $500K Over ‘Unlicensed’ Loans
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