Cryptocurrency Financial News
Kalin Metodiev emphasized that Nexo has been navigating through conversations with regulators for the past couple of years to ensure compliance, and was surprised that this news was “thrown out there in public.”
Vauld’s parent company Defi Payments Ltd says the moratorium granted on Monday will give it the necessary breathing room to form a restructuring plan.
BlockFi, Celsius, Nexo, and more: tough times can lead to difficult measures, and this year’s bear market is showing no exception to some of these players. Look no further than the current state of affairs for centralized finance (CeFi) platforms, who have been facing substantial headwinds with no end in sight.
Now, after days of rumors and reported exploratory deals, reports have emerged that powerhouse crypto exchange FTX is putting together the final ties around an acquisition deal of BlockFi at just a $25M valuation. The news comes after reports emerged that FTX passed on an acquisition deal for Celsius after seeing the CeFi firm’s balance sheet.
BlockFi On The Block
Should the purchase come to fruition at the reported valuation, it’ll be a major hit for BlockFi equity holders, following a nearly $5B valuation last year in the midst of bull market movement. However, that $25M number could move drastically between today’s reports and closing time – and a successful acquisition will of course take months to close. BlockFi CEO Zac Prince described the number as “market rumors” and outright denied the number, stating in a tweet that “we aren’t being sold for $25M.”
FTX is on the shortlist of exchanges that have sought out opportunity in the midst of crypto market downturn, exploring buyouts or equity share purchases for both Celsius and BlockFi in recent weeks, according to a variety of reports. However, based on the hard facts available to the public, the viability and likelihood of a buyout for BlockFi is still difficult to measure.
Celsius (CEL) has faced an uphill battle as the platform has still paused withdrawals for customers. | Source: CEL-USD on TradingView.com
Related Reading | Ethereum Loses Steam As Exchange Supply Spikes
State Of CeFi: Pulse Check
How did we get here? Bear market downturn over the past month or two has caused major pain for CeFi platforms, in a flurry of madness that started with Celsius freezing withdrawals earlier this month amid worries of a bank run and lack of immediate liquidity within the platform’s holdings. BlockFi has undoubtedly faced the heat, too, as FTX provided the firm with a $250M emergency line of credit just last week. While reports across the market suggest that BlockFi has several options on the table, it seems that few will lead down a path that spares equity shareholders of value at present time. Nexo has largely stayed quiet during the chaos, but there’s various internet sleuths who have targeted Nexo with content campaigns around the company’s practices as well.
Regardless of how you feel about CeFi, the decline of infrastructure in this bear market shouldn’t be celebrated – we’ll see how it all shakes out when the tides recover.
Related Reading | USDC Exchange Reserves Rise As Investors Escape From Bitcoin
Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
A pseudonymous Twitter account making a series of accusations against Nexo has caused the crypto lender to issue a cease and desist notice.
Nexo platform could rescue Celsius’ customers after “what appears to be the insolvency of the Celsius Network.”
Futures data and decreased demand for Tether signal that the crypto market is set for another round of pain.
There’s truly never a dull moment in DeFi. Reports have emerged this week that interest-yielding platform Nexo is pursuing an acquisition of an SEC licensed broker dealer with the intent to offer a “modified version” of the company’s products. How this would impact their current offering is unclear.
The move comes at a time of seemingly increased rocky roads for DeFi platforms.
Interest-Generating Products & Disruptive DeFi
Along with the company’s pursuit of a licensed broker dealer, Nexo is also in talks with nationally chartered banks. The platform is reportedly interested in finding a chartered bank partner that will sell Nexo products, likely with the intent to have better buy-in with U.S. regulators.
Additionally, reports state that the platform is looking at applying for an exemption to offer securities to non-accredited investors. Nexo is a London-based platform, which may play out to be a substantial advantage versus competitors that are stateside.
In recent weeks, U.S. state regulators have started to focus on DeFi platforms that are U.S.-based, namely Celsius and BlockFi. Regulators in a handful of states in the U.S. have begun issuing cease and desist demands for both firms. Meanwhile, major U.S.-based exchange Coinbase has been in a back-and-forth with SEC with regards to the exchange’s potential interest-yielding product, Coinbase Lend. Coinbase seems to have now placed an indefinite hold on a timetable for Lend, should the product even come to life at all.
Nexo is likely taking a close eye to see how these situations play out in the coming months, so they can position themselves accordingly when stateside regulators start eyeing non-U.S. based interest yielding firms that are operating in the states.
Native platform tokens, like $NEXO, have stayed away from U.S. integration as regulatory decisions still leave outcomes in question. | Source: NEXO-USD on TradingView.com
Related Reading | Bears Lose Hold On Market As Bitcoin Breaks $44,000, Crypto Market Tops Up $200 Billion
The Road Less Traveled
During the midst of the DeFi madness with regulators, Nexo has still been building on it’s capabilities and offerings. In an email this week, the firm announced the addition of top-ups, withdrawals, and borrowing and earning with DOGE. At the beginning of September, the platform crossed 2M users. And last month, the platform introduced free and instant transfers from one Nexo wallet to another, as well as unlimited free internal withdrawals.
Nonetheless, Nexo co-founder Antoni Trenchev has said that overseas exchanges will have to “cross the same bridge” that Celsius and BlockFi are currently having to cross, in due time. “We haven’t quite decided on the particular variations of the exemptions and exactly how we’re going to structure this,” added Trenchev.
Will Nexo have the advantage of seeing how things play out for U.S. based firms, or will overseas platforms be subject to increased scrutiny? Consumers are left waiting for the snail-paced regulatory movement to determine how things play out.
Related Reading | Did The SEC’s Gary Gensler Threaten Crypto And DeFi In The WaPo Interview?
Featured image from Nexo.io, Charts from TradingView.com
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