Nexo steps in to rescue rival Celsius on apparent insolvency

abdelaziz Fathi

Celsius Network, a cryptocurrency lending and borrowing platform, has received an unsolicited acquisition offer from rival Nexo Financial.

The offer to buy “any remaining qualifying assets” came after Celsius has paused all withdrawals, swap and transfers between accounts. The crypto lender said it was taking this action to put the firm in a better position to honour, over time, its clients’ withdrawal. Celsius also claims that it has valuable assets and is working to meet its obligations.

“Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our terms of use that will allow for this process to take place,” the troubled lender wrote on its website.

In a series of tweets, Nexo said that Celsius’s apparent insolvency has prompted it to offer to acquire its assets in order to supply immediate liquidity to affected clients. It added that before that and, as a sign of goodwill, they reached out yesterday to the Celsius team to provide support and assistance, but their help was denied.

“As the leading global provider of crypto-backed credit lines and a digital assets institution whose business now spans an exchange offering and institutional-focused capabilities, among others, we’re uniquely positioned to offer a strong buffer,” it added.

As per Nexo’s tweet thread, the offer is subject to its stringent risk management and collateral requirements and is aimed at providing immediate liquidity/ protection to Celsius’ clients.

However, Nexo warned that its offer will expire by June 20, unless otherwise rejected by Celsius or withdrawn, it added in a letter of intent.

Some blamed a sharp slump in bitcoin prices for recent troubles. Celsius, which at one point claimed more than $20 billion in assets, has apparently suffered an old-fashioned bank run which occurs when many clients withdraw their money because they believe their custodian may cease to function in the near future.

As per recent reports, the bear market has caused some damage to several players across the cryptocurrency world. Binance, the world’s largest cryptocurrency exchange, froze withdrawals for over three hours just as the price of bitcoin and other cryptocurrencies plunged.

Crypto lenders face increasing pressure as US regulators want to better police their products, which pay customers rates higher than most banks’ saving accounts. The SEC is reportedly investigating Celsius Network as a part of a broader scrutiny against cryptocurrency lending platforms.

Another crypto lender, BlockFi, was ordered to pay roughly $100 million to settle charges of offering unlicensed interest-bearing accounts for retail investors.

In comparison, Nexo acquired a stake in SEC-regulated Texture Capital in a move that clears the path for it to offer new services through a registered broker-dealer arm. The acquisition puts Nexo on a firmer regulatory footing with the Securities and Exchange Commission and positions it to offer a broader range of products, including blockchain-based securities. It also allows the platform to perform all operations in a regulatory compliant manner.

Read this next

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎


Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.


FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.