Nexo hires Citibank to advise on acquisitions during market turmoil

Crypto lending platform Nexo says its strong balance sheet allows it to come to the rescue to provide liquidity during the current market turmoil by acquiring the assets of struggling crypto firms.

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 that investors can regain access to blocked funds.

Last week, Antoni Trenchev, co-founder and managing partner at Nexo, told Bloomberg that the current crypto crash reminds him of the Panic of 1907 — where major Wall Street institutions were forced to bail out other struggling companies:

“This honestly reminds me of the 1907 banking panic where JP Morgan was forced to intervene with his own money and then get all those solvent guys together to sort out the situation.”

In the blog post, Nexo boasted that it had always had a sustainable business model that did not engage in risky lending practices, putting it now in a position of “unmatched stability”, meaning it is in a unique position to step into the rift to overcome struggling to help companies:

“The crypto space is about to enter a phase of massive consolidation that has already begun with the remaining solvent players, such as Nexo, expressing their willingness to acquire the assets of companies with solvency problems in order to provide instant liquidity to their customers and provide relief to the entire industry.”

The message revealed that Nexo has already privately contacted a number of struggling crypto firms and offered various ways to provide liquidity assistance.

On June 13, Nexo publicly announced that it was willing to take over some of Celsius’s outstanding loans, following revelations that the disclosure platform was experiencing a major liquidity crisis.

On the same day, Nexo (NEXO) plunged nearly 25%, dropping to a new annual low of $0.61 per token as fears of major contagion from decentralized financial (DeFi) echoed through the market.

Three days later, fears of contagion had been rekindled when investment firm 3 Arrows Capital (3AC) failed to meet margin calls — losing $400 million in multi-position liquidations. Nexo says it has no exposure to 3AC.

Unlike many other controversial companies, Nexo has 100% liquidity to meet its $4.96 billion debt obligations, according to US-based audit firm Armanino.

Related: Celsius Crisis Exposes Low Liquidity Problems in Bear Markets

Since the big drop on June 13, the price of NEXO has stabilized and is currently trading at $0.65, according to data from TradingView.