By
Temitope Olatunji
February 2nd, 2024
Only time will tell whether this offer to help will be accepted as it expires on the 20th of June.
Cryptocurrency lender Nexo AG has extended an offer to lend a hand of help to Celcius, one of its top competitors in the space, as the latter is experiencing unprecedented times amidst the current market downturn.
The cryptocurrency ecosystem has been experiencing a lot of significant onslaughts all year long, and while many thought the industry has bottomed out, the broader ecosystem saw a bigger decline, as it opened the week to a massive bearish dump. The combined crypto market capitalization slumped by 11.89% to $973.14 billion, a dive below the significant $1 trillion level.
This series of events has caused the “extreme market conditions” which Celsius used as a basis to pause all forms of withdrawals on its platform. The halt in activities has placed the crypto lender in a position in which its solvency is being questioned and knowing that the digital currency ecosystem does not like situations like this, Nexo is offering the company a way out before things get worse.
In a Twitter thread, Nexo said all of its products, including “Borrow, Earn, Exchange, and the Nexo Card” are functioning normally, adding that its withdrawals are being processed instantly. Nexo boasted that it has devised a risk management structure that makes its business thrive, irrespective of market conditions.
All Nexo products are operating normally – Borrow, Earn, Exchange, the Nexo Card.
As always – deposits and withdrawals are processed instantly so that all of you can make the necessary arrangements in this latest downturn in the markets. 1/
— Nexo (@Nexo) June 13, 2022
Considering its robust outlook, Nexo claimed it is in the best position to acquire some of Celsius’s assets, particularly its collateralized loans, subject to its risk management provisions.
“The Nexo team has never cheered for the failure of any blockchain business but we have warned that operating a sustainable business model based on prudent risk management is what differentiates Nexo and allows us to maintain financial stability in any market circumstances,” Nexo said in the tweet, “Nexo is in а solid liquidity and equity position to readily acquire any remaining qualifying assets of Celsius, mainly their collateralized loan portfolio. We are putting together an offer to Celsius to that accord and will communicate it publicly.”
Nexo Offer to Celsius – a Help or Exploit?
While it is not uncommon to offer help to companies in the traditional financial industry with operational and financial challenges, related helps in the crypto industry is largely suspicious. While Nexo comes with goodwill as noted, the tweet conveyed a message that showed its first attempt to help was rejected by the Celsius team.
“As a sign of goodwill and in an attempt to support the digital asset ecosystem in these difficult times, yesterday we reached out to the Celsius team to offer our support, but our help was refused. We firmly believe that much can be done to help Celsius’ clients,” the tweet reads.
This refusal can be interpreted by observers as Celsius’ way of attributing the help to a form of exploitation in its most vulnerable state. However, time will tell whether this offer to help will be accepted as it expires on the 20th of June.