CA DFPI Revokes CFL License of Crypto Lender

The California Department of Financial Protection and Innovation (DFPI) recently announced a settlement agreement with a crypto lender that, among other things, revoked the company’s California Financing Law (CFL) license, which had been suspended since November 2022.  The DFPI also issued a $175,000 fine, which was waived due to the crypto lender’s bankruptcy and operational closure, and to prioritize consumer recovery.

Based on examination findings, the DFPI alleged, among other things, that the company:

• Made loans without evaluating a borrower’s ability to repay;
• Charged interest on loans before disbursement; and
• For certain loans, did not give credit counseling and failed to report payment information to any consumer reporting agency.

The crypto lender, which made consumer and commercial loans secured by digital assets, neither admitted nor denied the findings of fact and conclusions of law.