Nexo Proposes Celsius Buyout as Rival Lending Platform Halts Withdrawals

Celsius said it also paused its swap and transfer products and did not provide a timeline for resuming withdrawals.

AccessTimeIconJun 13, 2022 at 7:53 a.m. UTC
Updated Jun 14, 2022 at 8:36 a.m. UTC
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Cryptocurrency lending platform Nexo expressed interest in buying certain assets from rival Celsius after the lending platform said it was freezing withdrawals and transfers because of extreme market conditions.

In a letter to Celsius Monday, Nexo said it was particularly interested in Celsius’s collateralized loan portfolio. Nexo publicized the letter, which didn't mention a price, in a tweet.

In a blog post earlier Monday, Celsius announced it would also pause its swap and transfer products. It did not provide a timeline for resuming withdrawals. The announcement comes on top of Celsius telling nonaccredited investors they could no longer transfer funds.

"We are working with a singular focus: to protect and preserve assets to meet our obligations to customers,” Celsius said. “Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options, this process will take time, and there may be delays."

The cryptocurrency market has slumped in recent weeks amid weakness in the macroeconomic environment. Bitcoin (BTC) has declined for almost 12 straight weeks, sliding from almost $49,000 in March 2022 to under $25,000. The total crypto market cap, which peaked at about $3 trillion in November, dropped below $1 trillion today, TradingView data shows.

In its letter, Zug, Switzerland-based Nexo said it was looking to acquire assets “mostly or fully of collateralized loan receivables secured by corresponding collateral assets, as well as brand assets and the customer database."

In an audit earlier on Monday, Nexo said it had $6.2 billion in customer liabilities and held assets in excess of that amount.

The NEXO token price is down by 22% in the past 24 hours amid a market-wide sell-off. Celsius' CEL token has lost more than 50% of its value following its announcement.

Celsius, which is headquartered in New Jersey and has a subsidiary in London, had not responded to requests for comment by publication time.

UPDATE (June 13, 08:45 UTC): Adds Nexo's letter of intent, Nexo liabilities; removes tweet saying offer letter was being prepared.

UPDATE (June 13, 09:54 UTC): Wraps earlier story on Celsius’ actions starting in third paragraph; adds crypto market background.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.


Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


CoinDesk - Unknown

Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.