Digital asset manager Nexo responded to the news of its rival Celsius pausing withdrawals by tabling a proposal for a buyout of certain of the firm’s liquid assets.
Pointing to “what appears to be the insolvency” of Celsius, Nexo took to Twitter on Monday morning to post a letter of intent outlining its “potential interest” to acquire “certain remaining qualifying assets, mainly collateralized loan receivables secured by corresponding collateral assets, brand assets and customer database of the business … of Celsius Network LLC and Celsius Lending LLC.”
After what appears to be the insolvency of @CelsiusNetwork and mindful of the repercussions for their retail investors & the crypto community, Nexo has extended a formal offer to acquire qualifying assets of @CelsiusNetwork after their withdrawal freeze. https://t.co/JFtKTHRLcY
“Nexo has been an independent observer of the latest developments at Celsius and is mindful of the detrimental repercussions for retail investors and the blockchain community at large,” reads the letter. “Nexo’s underlying sustainable business model has allowed it to maintain financial stability in any market circumstances and as a result, the company is in a solid liquidity and equity position to help mitigate the consequences of Celsius’ distressed state.”
On Sunday night, with crypto markets already in freefall, controversial crypto lender Celsius announced it was suddenly pausing all customer withdrawals, swaps, and transfers.
"We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations," the company wrote in a blog post on Medium. "We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and p...
The firm added that—subject to its risk management and collateral requirements—it could “readily acquire from Celsius part or all qualifying, outstanding collateralized loan receivables secured by their corresponding pledged cryptocurrency collateral.”
According to Nexo, the offer will remain in effect for one week—until 4:30 am UTC on June 20, 2022—unless accepted or rejected by Celsius, or withdrawn prior to that time.
Celsius freezes withdrawals
The New York-based Celsius announced that it is freezing all withdrawals and transfers between accounts late on Sunday night. The firm claimed that it is taking this action “to put Celsius in a better position to honor, over time, its withdrawal obligations."
.@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2
CEL, the token underpinning the Celsius platform, responded to the announcement by plunging 70% in just one hour from a prior high of $0.49 to $0.15. At time of publication, CEL was changing hands at just under $0.19, per CoinMarketCap.
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The price of Et...
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