As the story of FTX’s total collapse continues, Nexo tweeted that its exposure is nil following the recent withdrawal of total balances held on the troubled exchange.
.@nexo Net exposure to FTX/Alameda is $0.
As a conservative institution with strict risk management @nexo We have secured *all* our funds by withdrawing our full balance from the exchange in the past few days, as evidenced by our on-chain data.https://t.co/py8fzBDKbP
1/— Nexo (@Nexo) November 8, 2022
On November 8th, the issue of cryptocurrency contagion came to the fore again as FTX filed for bankruptcy. The cryptocurrency industry is inextricably linked, as evidenced by the collapse of the Terra ecosystem in June.
Binance jumped to save FTX from the liquidity crisis by announcing plans to acquire FTX outright, but the situation for FTX was even more dire. It also said an investigation by U.S. regulators is imminent, and that “issues are beyond our ability to control or assist.”
Speculation continues to mount as to which CeFi lending platform will be next, as Celsius, Voyager and others did after the UST de-pegged.
Nexo is trying to put users at ease
Co-Founder and Managing Partner of Nexo as early as November 9 Antoni Trenchev He repeated the above tweet stating that his company is not currently involved with FTX. He also added that “a small amount of Alam de Alone” was liquidated.
in the meantime @nexo Your exposure to FTX/Alameda is $0. Our sympathies go out to all who have been directly or indirectly affected by recent events as we have withdrawn all balances and pre-cleared collateral for a small Alameda loan.https://t.co/OGov0Gjql9
1/— Antoni Trenchev (@AntoniNexo) November 9, 2022
trenchchev He also said that according to a real-time audit provided by Armanino LLP, Nexo’s assets exceed its customers’ liabilities, with Nexo’s native token making up less than 7% of its assets.
over a year ago, @nexo & @Armanino LLP Pioneering real-time audits of Nexo assets under custody and $NEXO Tokens <7%) exceed customer debt.
We have asked more companies to go through a similar process https://t.co/V3uZExIuQV
2/— Antoni Trenchev (@AntoniNexo) November 9, 2022
But given the frequency with which users are assured that everything is fine, it’s understandable that such guarantees have come to be viewed with skepticism.
dirty bubble media I posted a thread disputing Nexo’s claims. The company questioned the effectiveness of Armanino’s audit procedures, saying the company did not provide an opinion and had only seen records showing assets exceeding liabilities.
The thread also says “Specific holdings, amounts in each category, and types of assets owed.In other words, readers lack sufficient information to form an opinion on the health of the balance sheet.
This is especially true for loans, where the documents do not contain an assessment of non-payment risk.
“Armanino simply looks at the Nexo loan deal and says, ‘Yes, they have a deal X will repay! There is no assessment of the likelihood that these loans will be repaid.“
The last point concerns the statement “assets exceed liabilities”. According to Dirty Bubble Media, the extent is not indicated.
CryptoSlate reached out to Nexo for comment, but did not receive a response at press time.
Crypto.com Suspends USDC and USDT Withdrawals on Solana
A tweet by Lars Hoffmann, director of research at The Block, showed a screen grab from Crypto.com announcing the suspension of USDC and USDT withdrawals and deposits on the Solana blockchain.
Has anyone else gotten this? pic.twitter.com/LmX5LtXV4x
— Lars (@lars0x) November 9, 2022
However, USDC and USDT withdrawals appear to be segregated onto the Solana blockchain as the notice states that withdrawals will be available via other chains such as ETH.
At this stage, it is unclear if this is a temporary network issue or if a more serious and persistent factor is at play.
