On October 28, the California DFPI revoked a cryptocurrency lender’s California Licensing Law (CFL) license based on alleged violations, including improper practices related to digital asset collateral loans, including failing to consider the ability to repay, charging interest on undisbursed funds, failing to offer credit counseling, and failing to accurately disclose APR. DFPI’s allegations were described in the settlement agreement, in which the cryptocurrency lender agreed to the license revocation. As previously covered by InfoBytes, the DFPI suspended the cryptocurrency lender’s license in 2022 pending a DFPI investigation.
The settlement agreement included several key terms: the company agreed to a desist and refrain order and an order to discontinue unsafe or injurious practices, and DFPI imposed a fine of $175,000 for the alleged violations of the CFL. However, due to the company’s ongoing bankruptcy proceedings and cessation of operations, the commissioner waived the fine.
