NEXO seeks Citibank’s advice to fight market downturn
Crypto lending platform Nexo has appointed Citibank to advise on acquisitions from struggling crypto firms.
Crypto lending platform Nexo, says that ‘“We’re in this together”. He also added its strong balance sheet means it can ride to the rescue to provide liquidity during the current market turmoil by acquiring the assets of struggling crypto firms.
Nexo announced in a blog post that it is presently receiving advice from Citigroup, the banking giant, on how best to acquire the assets of insolvent crypto firms so that investors can regain access to blocked funds.
Antoni Trenchev, co-founder and managing partner at Nexo, told Bloomberg last week that the current crypto crash reminds him of the Panic of 1907 — where major Wall St institutions were forced to bail out other struggling firms.
“This reminds me, quite frankly, of the 1907 bank panic where JP Morgan was forced to step in with his own funds and then rally all those guys that were solvent to fix the situation.”
In the same blog post, Nexo added that it had always run a sustainable business model that didn’t engage in risky lending practices, as a result, it now occupies a position of “unmatched stability,” meaning that it is exclusively placed to step into the breach to help shore up struggling firms.
“The crypto space is about to enter a phase of mass consolidation which has already begun with the remaining solvent players, like Nexo, expressing their readiness to acquire the assets of companies with solvency issues in order to supply immediate liquidity to their clients and relief to the entire industry.”
The post makes it clear that Nexo has already made contact with a number of struggling crypto firms in private, offering up different ways to provide liquidity support.
On June 13, Nexo declared that it was prepared to acquire some of Celsius’ outstanding credits, following revelations that the fellow lending platform was suffering a major liquidity crisis.
On the same day, NEXO, Nexo’s native token, plunged nearly 25%, falling to a new yearly low of $0.61 per token as fears of major DeFi contagion echoed through the market.
It took 3 days to reignite the contagion fears as investment firm 3 Arrows Capital (3AC) failed to meet margin calls — suffering a loss of $400M in liquidations across multiple positions. Though Nexo says it doesn’t have any exposure to 3AC.
According to U.S.-based audit firm Armanino, Nexo has 100% liquidity to meet its $4.96 billion worth of debt obligations, unlike many other embattled firms,
NEXO faced a major drawdown on June 13. Though now NEXO’s price has stabilized and is currently trading for $0.65, according to data from TradingView.
