Nexo seeks advise from Citibank on acquisitions during bear market

By: Henry Felix

June 23, 2022 9:44 AM

Nexo has contracted Citibank as its advisor on acquisitions of struggling crypto firms just days after the recent Celcuis struggle due to market turmoil.

Crypto lending platform Nexo, believes that due to its strong balance sheet, it will be able to rescue struggling crypto firms by acquiring their assets and providing liquidity during the current market turmoil.

According to a recent blog post, the crypto lending firm announced that it is currently receiving advice from Citigroup on how best to acquire the assets of insolvent crypto firms who have struggled in the current crypto market turmoil 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, which major Wall Street institutions were forced to bail out other struggling firms.

“This makes me recall the 1907 bank panic where JP Morgan was forced to step in with his own funds and then rally all those other guys that were solvent to remedy the situation.”

In the blog post Nexo reported that it didn’t engage in risky lending practices and has a sustainable business model which has resulted it now being in a position of “unmatched stability,” placing the firm in a unique state to step into the breach to help rescue struggling crypto firms.

The post also revealed that Nexo has already contacted a number of struggling crypto firms in private, offering up diverse ways to provide liquidity support.

In a public announcement on June 30, by Nexo, the firm stated that it was prepared to acquire some of Celsius outstanding loans, after reports revealed that the fellow crypto lending platform was suffering a major liquidity crisis after halting user withdrawals.

However, NEXO token plunged nearly 25% on the same day they announced to acquire some of Celsius outstanding loans, falling to a new yearly low of $0.61 per token as fears rippled through the market.

Investment firm 3 Arrows Capital (3AC) failed to meet margin calls three days later and suffered a loss of $400M in liquidations across multiple positions, increasing contagion fears around major DeFi lenders. Meanwhile, Nexo distanced itself from the investment firm saying it hasn't been exposed to 3AC.

Armanino, a U.S based audit firm reported that Nexo has 100% liquidity to meet its $4.96B worth of debt obligations unlike many other struggling crypto firms.