The co-founder and managing partner of the crypto lending platform Nexo, Kalin Metodiev, says that bankruptcy or insolvency are not in “Nexo’s reality.”
In an Ask Me Anything (AMA) video that was posted on YouTube on October 4, Nexo’s founders and managing partners, Metodiev and Antoni Trenchev, answered questions from the community and talked about recent rumours that Nexo might soon run out of money.
Metodiev said very clearly in response to a question about the bankruptcy rumours and whether Nexo will be “the next Celsius and Voyager”:
Related: Nexo’s co-founder says the actions of state regulators have taken him by surprise.
“Nexo’s reality does not include insolvency or bankruptcy, and we believe, hope, aspire, and work very hard to give our users a very strong and stable future.”
“Finding similarities between these two names [Celsius and Voyager] or other names in space is very far from reality, and I think this is very easy to prove,” he said.
In addition to what Metodiev said, Trenchev said, “I didn’t want to name names, but I’ll name a few: No exposure to the Terra (LUNA) debacle and no lending at all to Three Arrows Capital.”
“In the bankruptcy filings for the two names in the question, you can see a list of creditors. “Nexo is not on that list,” he said.
A stop-and-desist order from the Kentucky Department of Financial Institutions on September 26 said that Nexo’s “liabilities would exceed its assets” if its Nexo (NEXO) token holdings were taken out of the equation. This seems to have sparked some of the rumours. This is just one of many orders to stop doing something that have been filed against Nexo.
Mike Burgersburg, the author of Dirty Bubble Media, and other market analysts have said that Nexo could go bankrupt because it holds most of the NEXO tokens on its platform. This is similar to Celsius, which owned more than 50% of its native token, CEL.
In line with this way of thinking, he said, a sharp drop in the price of NEXO could have a big effect on the company.
But a Nexo spokesperson quickly denied the claims to Asian Trade, saying that the information they gave to Kentucky regulators was for one of the Nexo Group’s entities and that “NEXO tokens represent less than 10% of the company’s total assets.”
In the AMA, the Nexo founders also answered a question about the company’s recent attestation, which said that all of Nexo’s $3.7 billion in customer liabilities are 100% collateralized but gave no other information.
Related: California is the seventh state to order Nexo’s interest account.
When asked if the company plans to “include a list of assets in the attestation instead of just a total dollar amount,” the answer was “no.” Metodiev said that Nexo will be more open, but he didn’t say what that would mean. He also said that the company needs to balance the need for privacy with the need to stay ahead of the competition.
“The more open we can be, the better for our community, for our users, and for people making investment decisions. We would keep making this information more open, but first we would make sure that it didn’t hurt our ability to compete.
“I think you know that while we are committed to increasing transparency and will keep doing so, it needs to be done with the right amount of duty and responsibility to make sure that this transparency is constructive and helpful for making decisions,” he said.