Analyst Raising Concerns Over Nexo
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An editor at Coincrop
03 Oct 2022 | 3 min read
any crypto lending platforms have suffered since the Terra implosion, with some even filing for bankruptcy. Celsius was one of the victims, while others continue to experience liquidity issues. Some experts suggest that Nexo might be next.
In a recent Twitter thread, author and cryptocurrency scam exposer Mike Burgensburg commented on Nexo's uncertain future. He pointed out that according to state regulators, Nexo would be considered "insolvent" if they didn't count the NEXO tokens in their balance sheet.
As of July 31, 2022, Nexo Capital possessed 959.089.286 NEXO tokens, which accounted for 95.9% of all in circulation and were worth $682.823.570
CeFi platforms tend to be closely intertwined, which can create a "contagion effect" that spreads across the sector. Will such contagion hit Nexo next? The company denied similarities after Celsius made headlines in July.
Nexo published a rebuttal in an attempt to ease investors' minds and clear its name. Antoni Trenchev, Nexo co-founder and Managing Partner, commented on the situation as a response to an insolvency prediction for end-of-year 2022.
Trenchev stated that his company is different than its crypto lending competitors because they don't take client funds and stake them in yield-generating protocols or make undercollateralized loans. “Nexo is fundamentally different,” said the executive, meaning that they haven't had to use any of those same measures to stay afloat.
MikeAn editor at Coincrop
Mike is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely putting his latest car project back together.
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