The crypto lending platform Nexo claims that its strong balance sheet means it can come to the rescue to provide liquidity during the current market turmoil by acquiring the assets of struggling crypto firms..
In a blog post, Nexo announced that it is currently taking advice from banking giant Citigroup on how best to acquire the assets of insolvent crypto firms so that investors can regain access to locked funds..
Last week, Antoni Trenchev, co-founder and managing partner of Nexo, told Bloomberg that the current cryptocurrency crisis reminds him of the Panic of 1907.when major Wall Street institutions were forced to bail out other struggling companies:
“This reminds me, frankly, of the bank run of 1907, in which JP Morgan was forced to step in with their own funds and then round up everyone who was creditworthy to fix the situation.”
In the blog post, Nexo boasted that it had always run a sustainable business model that did not engage in risky lending practices, as a result it now occupies a position of “unrivaled stability”, meaning it is in a unique position to step in and help shore up struggling businesses:
“The cryptocurrency space is about to enter a phase of massive consolidation that has already begun with remaining solvent players such as Nexo expressing their willingness to acquire the assets of companies with solvency problems in order to supply liquidity. immediately to their customers and relieve the entire industry.”
The post revealed that Nexo has already contacted a number of struggling crypto firms privately, offering different ways to provide liquidity help..
On June 13, Nexo publicly announced that it was willing to acquire some of Celsius’s outstanding loans, following revelations that the peer lending platform was suffering from a major liquidity crisis.
That same day, Nexo (NEXO) plunged nearly 25%, falling to a new yearly low of $0.61 per token.as fears of a major decentralized finance (DeFi) contagion echoed through the market.
Three days later, contagion fears were reignited when investment firm 3 Arrows Capital (3AC) failed to meet margin calls, suffering a $400 million loss in liquidations. across multiple positions. Nexo says it has no exposure to 3AC.
Unlike many other struggling companies, Nexo has 100% liquidity to meet its debt obligations for a value of USD 4,960 million, according to the American auditing company Armanino.
Since the big crash on June 13, the price of NEXO has stabilized and is currently trading at $0.65according to TradingView data.
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