Nexo knew that Celsius was in trouble before the lender was stopped
Nexo knew that Celsius was in trouble before the lender was stopped
- It has been clear for some time that Celsius has difficulty fulfilling the retreat obligations, Nexo told Blockworks
- The payout stop from Celsius is the roller coaster ride for which crypto fans have registered, said a manager
It was not a fun start to the week for cryptocurrency enthusiasts. The prices fell on a broad front and the well-known crypto loan Celsius announced that the payments are to be suspended indefinitely.
But the rival Nexo was not surprised by the company's message - it was even so opened The acquisition of some necessary assets from Celsius only frustrated the customers a few hours after his worrying announcement.
On June 13, Nexo announced on Twitter that it had extended Formal offer from Celsius. The crypto credit company announced Blockworks that it was already aware of Celsius' impending problems.
"As an important participant in the [Over-the-counter] Interbank Digital Asset Markets, Nexo is of course close to everything that happens in this area," said a Nexo spokesman.
"From the publicly accessible on-chain data and customer reports, Celsius has had difficulty fulfilling the return obligations. From the perspective of risk management, our results have pointed out Celsius' non-sustainability."
nexo turned to Celsius on Sunday to see how it could help with the provision of liquidity, but "they claimed that there was no need and rejected our help," said the spokesman. This prompted Nexo to submit a formal offer on Monday that was publicly shared.
When asked what Nexo had prompted to buy Celsius' assets immediately, the company, based in Zug, repeated that it only wanted to look for crypto investors.
"The timing is of crucial importance, because ultimately Nexo's main concern is the protection of the interests of crypto users in this unfortunate situation," said Nexo. "In the further course of the events, the company hopes that Celsius will accept this help and that as few investors will be affected as possible."
At the time of printing, Nexo said that Celsius has not yet received an answer to his formal offer.
Celsius offers customers high interest rates for token deposits that are borrowed to other crypto companies to achieve a return. From a regulatory point of view, the business with crypto lending is still opaque.
The network, which Chief Executive Alex Mashinsky is managed, managed a fortune of around $ 12 billion in May and describes itself as a decentralized financing (Defi) and as a centralized financial provider.
"This is the problem with Celsius - it is not transparent in an open main register. It is operated by centralized actors and you have to basically trust the administrators of the platform," said Russell Starr, CEO of Valor.
"Defi is the opposite. If at all, I see this event as a long-term call to strengthen the defi protocols."
The "extreme market conditions" that Celsius led as the reason for his payout stop seemed to have extended the Binance crypto tour. Industry commentators pointed out that the two incidents could strengthen the concerns of investors about the market in the coming days.
"The investors are clearly concerned about a situation that would similar to that of the Luna crash," said Walid Koudmani, Chief Market Analyst at Financial Brokerage XTB and added that Supervisory authorities already take a close look at crypto finance products with high returns on passive investments.
"The situation with the Celsius network could be an omen for what will come in the near future, since the regulatory authorities begin to pay more attention to this and the investors are more skeptical about such projects and the sector as a whole," he said.
But others suggested that each sector will be run through rocky sections in the early stages before rest.
"If you are in crypto, this event that unfolds with Celsius is the roller coaster ride for which you have registered," said Garry Krugljakow, CEO of the Defi Protocol Gogo Protocol. "For some it is painful and could become even more painful if further explosions occur - which is certainly possible - but that is the nature of this emerging market."
Celsius did not react immediately to a request for comment from block works.
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The contribution Nexo knew that Celsius was in difficulties before the loaner's dismissal was frozen, there is no financial advice.