Regulatory Turbulence in the US: Nexo Fined Half a Million, Clarity Act Divides Crypto Industry

California Imposes Fine on Nexo

The California Department of Financial Protection and Innovation (DFPI) has fined crypto platform Nexo $500,000 ^[1]. The reason: Between 2018 and 2022, the platform allegedly issued thousands of unlicensed, crypto-backed loans to at least 5,456 California residents ^[1].

According to authorities, Nexo Capital Inc. neither possessed the required state license nor did the company verify borrowers' repayment capacity, existing debts, or creditworthiness ^[1]. These violations are particularly serious as they breach fundamental consumer protection standards.

Far-Reaching Consequences for the Company

In addition to the monetary fine, Nexo must transfer all assets of California customers to a licensed US subsidiary within 150 days ^[1]. The measure comes at a particularly sensitive time for the company: The lending service had only recently signaled its intention to re-enter the US market after its withdrawal in 2022 ^[1].

This is not Nexo's first regulatory clash. In 2023, the company already paid a total of $45 million in settlements to the SEC and several states ^[1]. The renewed fine is likely to further complicate the lending service's ambitions in the United States ^[1].

Clarity Act Causes Market Turbulence

While enforcement measures are being implemented in California, the proposed Clarity Act is causing controversy at the legislative level. The bill was supposed to establish the market structure of the crypto market in the US for the future ^[2]. However, a crucial hearing fell through at the last second ^[2].

Just hours before the scheduled meeting, Coinbase CEO Brian Armstrong publicly withdrew support for the bill ^[2]. "We appreciate the hard work of the Senate members who sought a bipartisan outcome, but this version would be significantly worse than the status quo," Armstrong wrote on X ^[2]. "Better no law than a bad law" ^[2].

Significant Losses for Crypto Stocks

The setback has not left crypto stocks unscathed either. Coinbase in particular took a hit ^[2]. The security listed on Nasdaq under the ticker COIN lost nearly 9.0 percent of its value since Wednesday's weekly high and was trading at $239 at the time of reporting ^[2].

Circle's stock (CRCL), also listed in the US, lost as much as 13 percent and is trading at $76.60 ^[2]. This represents a 70 percent loss from its all-time high ^[2].

Circle Grows Despite Turbulence

Nevertheless, Circle continues to grow steadily. The company recorded significant gains in the third quarter of 2025 ^[2]. According to Circle Internet Group, the circulating supply of its stablecoin USDC rose to $73.7 billion ^[2]. This represents an increase of 108 percent compared to the previous year ^[2].

The current developments demonstrate the ongoing regulatory uncertainty in the United States: While enforcement measures against individual companies continue, the legislative creation of a clear legal framework remains contentious.