Crypto lending platform Nexo, says 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 businesses.
In a blog post, Nexo announced that it is currently receiving advice from banking giant Citigroup on how best to acquire the assets of insolvent crypto firms so investors can regain access to stranded funds.
Last week Antoni Trenchev, co-founder and managing partner of Nexo, told Bloomberg that the current crypto crash reminded him of the Panic of 1907 – where major institutions on Wall St were forced to bail out other struggling companies. .
“It reminds me, quite frankly, of the bank panic of 1907 where JP Morgan was forced to step in with its own funds and then rally all these guys who were solvent to sort it out.”
In the blog post, Nexo boasted that it has always used a sustainable business model that did not engage in risky lending practices. As a result, he is now in a position of “unmatched stability”, meaning he is uniquely positioned to step into the breach. to help support struggling businesses.
“The crypto space is about to enter a phase of mass consolidation that has already begun with the remaining creditworthy players, like Nexo, expressing their willingness to acquire the assets of companies with creditworthiness issues in order to provide immediate cash to their customers and relieve the entire industry.
The post revealed that Nexo has already reached out to a number of struggling crypto firms privately, offering different ways to provide liquidity assistance.
On June 13, Nexo publicly announced that it was ready to acquire some of Celsius’ outstanding loans, following revelations that the fellow lending platform was suffering from a major liquidity crisis.
On the same day, Nexo’s native token NEXO plunged almost 25%, falling to a new yearly low of $0.61 per token as fears of a major DeFi contagion rippled 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 troubled companies, Nexo has 100% cash to service its $4.96 billion in debt, according to US audit firm Armanino.
Related: Celsius crisis exposes low liquidity issues in bear markets
Since the major draw on June 13, the price of NEXO has stabilized and is currently trading at $0.65, according to data from TradingView.