The cryptocurrency service Nexo has sharply defended itself against rumors of possible bankruptcy

With Celsius, BlockFi and Voyager Digital, at least three cryptocurrency services have recently encountered serious liquidity problems. Rival Nexo goes on the offensive to show that it works differently.

Withdrawals at Celsius have been stagnant for over two weeks, at BlockFi only an emergency loan from FTX has been able to keep operations running – these are just two examples of crypto platforms that have apparently played away in the credit service sector and have existential difficulties in maintaining liquidity. Billions of dollars in customer funds are also affected. The competitor Nexo has also been spoken to in public, especially harshly by the Twitter account otteroooo.

Nexo is 87 percent likely to have financial difficulties by the end of the year, Otteroooo claims in a thread and also presents alleged evidence. in a second thread otteroooo goes even further and accuses Nexos co-founder Kosta Kantchev of misusing funds raised from a charity to build a private smart mansion. These accusations quickly spread in the crypto scene, and Nexo feared that customer funds would be withdrawn.

Therefore, Nexo now sees it as its duty to intervene against defamation and uses various channels to do so. A termination notice was sent to otteroooo, but so far apparently without success. In a long blog post, Nexo tries to show that otteroooo deliberately spreads RD&D. Otteroooo started his rumors to attract more Twitter followers so he could sell his account for a government fee. otteroooo does not even shy away from deliberately confusing Nexo co-founder Kosta Kantchev with Bulgarian Constantine Krastev. It was the latter who was linked to the charity money scandal. In general, Nexo argues that otteroooo follows a classic tactic of fake news, thus discrediting the crypto industry.

To refute the allegation of hidden liquidity issues, Nexo first refers to the certifications generated daily by the TrustExplorer service. This attestation currently confirms that the $ 4 billion held by Nexo is more than 100 percent covered by reserves. To dispel any remaining doubts, Nexo also approached the cryptospecialist portal Decrypt and presented the journalists there with additional internal material. They aim to prove that Nexo does not need to shake before decoupling Lido Stakes Ethereum (stETH) from Ethereum (ETH) because there is adequate security.

Bottom line: Is Nexo really a serious crypto interest provider?

From the investors’ point of view, the most important point in the discussion about Nexo is whether deposits invested there for interest rates are really safe. In its defense of Nexo, Decrypt is fair enough to mention that Nexo is one of the investors in the media platform. In addition, the background of the TrustExplorer certificate is critically examined and the difference between a certificate and an audit is pointed out. This gives us a pretty positive picture of Nexo. In the case of the story of Kosta Kantchev and allegedly redirected donations, the evidence for a deliberate confusion is strong. And Decrypt, which has gained more insight into Nexo’s books, is unlikely to risk its growing credibility in laundering a single investor’s better judgment. Nexo announces that they offer slightly lower interest rates than competitors such as Celsius or BlockFi, but only provide secured loans and thus never risk customers’ funds. Based on the information currently available, this statement seems justified and it would be wrong to automatically derive a comparable situation at Nexo from the deep crises of BlockFi and Celsius.

Leave a Comment