Nexo platform could rescue Celsius' customers after “what appears to be the insolvency of the Celsius Network.”
There’s a glimmer of hope for the bear market’s most recent victim. Following reports that Celsius is insolvent, Nexo is offering a buy-out.
A Nexo representative told Cointelegraph that Nexo is trying to do the “right thing” as they are “mindful of the repercussions for retail investors & the crypto community.”
Celsius suspended all network withdrawals on Monday; users are not able to access their funds. In an open letter, Nexo has extended a formal offer to acquire qualifying assets of Celsius Network after their withdrawal freeze. The letter states:
“Nexo, its partners, and affiliates could readily acquire from Celsius part or all qualifying, outstanding collateralized loan receivables secured by their corresponding pledged cryptocurrency collateral, subject to Nexo’s risk management and collateral requirements.”
In a nutshell, the Nexo team would absorb all of Celsius’ loans and gain its customer database. The Nexo team has allowed seven days for the Celsius team to respond, as the proposal will terminate on June 20.
In a tumultuous weekend of market action, Nexo’s first call to help was rejected by the Celsius team on June 12:
“Yesterday [June 12] we reached out to the Celsius team to offer our support, but our help was refused.”
Separately, Nexo has reassured investors that funds are safe. The Nexo representative told Cointelegraph it was “the first crypto lender to publicly open its books to the public in real time back in September and invited all our competitors and responsible crypto platforms to follow our lead.”
Competitors including Ledn, a Bitcoin-only (BTC) credit and savings product platform have released similar statements to spread calm among investors. In a tweet, Ledn shared that customers’ investments are secure. BlockFi CEO Zac Prince tweeted that his business is operating normally. Ledn, Nexo and Blockfi have been open to talking about their business models with Cointelegraph previously.
Nexo is not the only company to come to the aid of Celsius. Bitcoin maximalist Cory Klippsten, founder of Bitcoin-only exchange Swan Bitcoin (who had previously called out Celsius as risky) has offered a “life raft” to Celsius investors.
Hey @celsiusnetwork users, I really hope you get your coins back from @mashinsky. And I also hope you never, EVER trust him again.— Cory Klippsten (@coryklippsten) June 13, 2022
NO MORE 1 BTC MINIMUM for the @swanbitcoin life raft. Free membership in Swan Private ($3000 value) for the first 1000 Celsius members who DM me.
For some commentators, such as analyst Will Clemente, comparisons between Luna’s implosion and Celsius’ apparent insolvency are too hard to ignore:
I guess Luna and Celsius will be our two sacrifices to the crypto gods for this bear market?— Will Clemente (@WClementeIII) June 13, 2022
As Klippsten and Nexo have made clear, the crypto community is attempting to limit the immediate fallout of Celsius' reported insolvency. The Nexo spokesperson said "[Nexo] hopes Celsius will accept this help and as few investors will be affected adversely as possible."