Overview
- State regulators said Nexo Capital issued 5,456 loans in California without a required financing license and without ability-to-repay checks.
- The unlicensed lending occurred between July 2018 and November 22, 2022 through Nexo’s Cayman Islands entity.
- Nexo must transfer California customers’ funds to Nexo Financial, its U.S. licensed affiliate, within 150 days and implement IP-based geoblocking for unlicensed services.
- DFPI cited Nexo’s marketing of no credit checks and reliance on overcollateralization, including liquidation rights at an 83.33% loan-to-value threshold.
- The action follows $45 million in SEC and multistate penalties in 2023, and reporting indicates Nexo’s U.S. reentry plans face renewed scrutiny.