Nexo Execs Deny Insolvency Rumors After Cease And Desist From 8 US States
- Nexo is not insolvent, claim the co-founders of the firm, adding that the platform has no ties or exposure to bankrupt crypto hedge fund 3AC or the Terra ecosystem (now Terra Classic).
- Co-founders of Nexo, Antoni Trenchev and Kalin Metodiev, confirmed that the firm has plans of expansion and is not insolvent, adding that “we work very hard.”
- Eight US state regulators recently issued cease and desist orders against Nexo for exposing its consumers to its unregistered crypto interest account program.
Popular crypto lending platform Nexo is not insolvent, claim the co-founders of the firm, adding that the platform has no ties or exposure to bankrupt crypto hedge fund Three Arrows Capital (3AC) or the Terra Classic (LUNC) project, which was responsible for the largest wipeout in the crypto space, draining $40 billion of investors’ money.
Crypto lending platforms that are operating in the US are currently facing bankruptcy proceedings in the courts. Celsius Network, Voyager Digital, and Vauld, three platforms that are currently in trouble over lack of funds and owe millions to their creditors, have all filed for protection under Chapter 11 bankruptcy and Voyager has already auctioned off its assets to crypto exchange FTX.
Voyager stated that it had “received multiple bids contemplating sale and reorganization alternatives, held an auction and, based on the results of the auction, has determined that the sale transaction with FTX is the best alternative for Voyager stakeholders.”
Nexo has around $4 billion in assets under management (AUM) and the crypto community is targeting the crypto lending platform as rumors of bankruptcy are floating in the air.
In a YouTube Q&A on Tuesday, the co-founders of Nexo, Antoni Trenchev and Kalin Metodiev, denied the rumors of insolvency and confirmed that the firm had no exposure to Terra or 3AC. Trenchev and Metodiev were asked by an anonymous user if Nexo is on the route to become the next Celsius Network or Voyager Digital.
“Insolvency and bankruptcy are nowhere in Nexo’s reality…We work very hard … we deliver a very strong and sustainable future for our users for many years to come, enriched with a number of additional services and products through integration of technology and disruption of existing services,”Metodiev said.
The executives further added that they have plans to expand their services and will debut into crypto trading and traditional capital markets with wealth and asset management solutions in the near future, thereby increasing its consumer base.
In the light of similar events, Nexo has been facing heavy scrunity from eight US regulators after the firm was issued cease and desist orders from the watchdogs for its unregistered crypto interest account program. The 8 US states include California, Vermont, Washington, Maryland, Oklahoma, South Carolina and Kentucky.
The Commissioner of California’s Department of Financial Protection and Innovation (DFPI) Clothilde Hewlett stated that “these crypto interest accounts are securities and are subject to investor protections under the law, including adequate disclosure of the risk involved.”
Similar orders were issued by other state regulators and it seems that the US market might be out of league for the crypto lending platform now. The interest bearing accounts that the regulators call unregistered securities provide investors high rates of interests to their customers.