Crypto, NEXO: Worries, 3 Billion Less Deposits

Between May and July of this year, Nexo saw a significant drop in deposits on its platform. Given the current context of mounting bankruptcies starting with withdrawals freezing, questions arise about the crypto giant’s financial health. Nexo’s spokesperson wants to be reassuring, as are the Celsius or Voyager representatives before the big dive. But there is no need to spread the FUD as we are told that all is well in the best worlds.

A month ago, Nexo offered to buy Celsius. However, data from his California accounting firm Armanino shows that deposits have fallen significantly.

NEXO
WaybackMachine

$3 billion in withdrawals in 2 months

The company’s customer commitments — the value of digital assets users have deposited on the platform — have shrunk to $3.9 billion. As of May 12, there were still $6.9 billion in real-time certifications issued by the Armanino LLP group accounting firm. The famous WaybackMachine is a valuable tool that preserves older versions of websites for posterity (but may still be a bit clunky for some).

NEXO

The bear market weakens companies

The decrease in customer obligations (debts) corresponds to a decline of about 44%, while the price of bitcoin (BTC) fell by about 20% and the price of ether (ETH) by 22%.
Expressed in bitcoins (BTC), customer liabilities fell from 261,111 bitcoins (BTC) to 169,672 bitcoins (BTC), down 35% over the same period.
The Cryptocurrency Research Company, mysterious investigationpublished its own review of Nexo’s data (see chart above): Nexo users cautious amid shaky market conditions and bankruptcies affiliated with other major crypto lending platforms. »

Nexo reassures its users

Nexo is reassuring and ensures that during this period of bear market.
It is true that the collapse of cryptocurrency prices this year has had very serious consequences of all kinds bank run : the FUD caused massive withdrawals, layoffs at major exchanges and successive bankruptcies. Since the crash of Terra (Luna), the dominoes have fallen one after the other: Voyager, Celsius, 2gether, Three Arrows Capital in particular have not weathered the storm and this may be just the beginning of a tsunami that (almost) threatens to wipe out everything in its path.
As you may have read in the Three Arrows Capital reveal, Nexo’s name was not one of those exposed. said the Nexo spokesperson.

Nexo says he has strong backs

Nexo says it lends on a strictly oversized basis, a practice that provides protection in the event of borrower default. Nexo’s spokesperson pointed out that ” At any time, Nexo’s assets under management exceed its liabilities, meaning we are stable and able to provide customers with their money at all times. »
Nexo has hired banking giant Citigroup to advise it on takeovers of risky platforms. This demonstrates, at least potentially, its absorptive capacity.

Possible NEXO . acquisitions

Nexo had announced an offer to buy assets from Celsius last month. This offer was formalized in a letter from an entity called Nexo AG in Zug, Switzerland. However, at the time, executives told CoinDesk that Nexo’s operations were based in Sofia, Bulgaria. According to the spokesperson, the company is based in London. We get a little lost…

Nexo had also offered to take over safe, a struggling crypto lending platform backed by Peter Thiel and Coinbase Ventures. The platform has halted withdrawals, cut jobs and is looking to restructure. Vauld sought protection from his creditors in Singapore.

Nexo has an extensive war chest for such operations and does not use customer money in any way for such operations. »

Nexo looks solid despite a significant drop in customer deposits and thus a drop in revenue. The nexo token (NEXO) has lost 80% this year and is currently trading at 70 cents. Debt from customers as of July 27, 2022 exceeds $3.8 billion and Nexo’s assets exceed those of its customers. The future will tell if Nexo is like the reed that bends under the storm without breaking.

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Mary Batshwok avatar

Mary Batshwok

Subprimes, financial crises, galloping inflation, tax havens… Bitcoin is designed for greater transparency and perhaps finally changing the situation. I try to understand this new environment and try to explain it myself. The road is undoubtedly long, but it is worth it.

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