California DFPI orders crypto service company to pay $500K | Orrick, Herrington & Sutcliffe LLP
On January 14, the California DFPI announced a consent order against a Cayman Islands-based company, which offers crypto-backed loans and services, and ordered it to pay a $500,000 penalty. The DFPI’s investigation revealed that, from July 26, 2018, through November 22, 2022, the company contracted for loans with 5,456 California residents without obtaining a California Financing Law (CFL) license, in violation of state law. Specifically, the agency found that the company was providing consumer and commercial loans to California residents through a crypto-backed lending program, which included both crypto and fiat money loans secured by crypto collateral.
During the same period, the company failed to consider borrowers’ ability…
