On November 18, the California Department of Financial Protection and Innovation (DFPI) announced an order suspending a cryptocurrency lender’s Calirfornia license for 30 days pending DFPI’s investigation. The suspension follows the DFPI’s notice to suspend issued on November 11, which was prompted by the cryprocurrency lender's November 10 announcement that it would limit platform activity, including pausing client withdrawals. DFPI noted that the cryptocurreny lended confirmed its “significant exposure to [a crypto asset platform]” and affiliated entities. DFPI further noted that the cryptocurrency lender expected “that the recovery of the obligations owed to us by FTX will be delayed as FTX works through the bankruptcy process.” According to he cryptocurrency lender, withdrawals would continue to be paused. DFPI also noted that in February 2022, the respondent was ordered to desist and refrain from offering or selling unqualified, non-exempt securities in the form of its interest accounts in California.

Later in the week, DFPI issued a notice to suspend a different cryptocurrency lender’s license for 30 days pending DFPI’s investigation into the respondent’s recent announcement to limit its platform activity, including pausing client withdrawals. On the same day as the DFPI announcement, the respondent sent a communication to customers signed by the CEO, stating: “I am sorry to report that the collapse of [the cryptocurrency lender that was issued a notice to suspend from DFPI on November 10] has impacted our business. Until we are able to determine the extent of this impact with specific details that we feel confident are factually accurate, we have paused deposits and withdrawals on [its own platform] effective immediately.” DFPI also noted that it is “investigating the extent to which [the cryptocurrency lender] has been affected by the bankruptcy of [the cryptocurrency lender that was issued a notice to suspend from the DFPI on November 10] and related companies.”