Antoni Trenchev, the co-founder and managing partner of crypto lending platform Nexo, has likened the current crypto crash to the Panic of 1907—the first global financial crisis of the 20th century, during which wealthy Wall Street institutions were forced to come to the rescue of their struggling peers.

“This reminds me, quite frankly, of the 1907 bank panic where JP Morgan was forced to step in with his own funds and then rally all those guys that were solvent to fix the situation,” Trenchev told Bloomberg TV on Friday. "That was pre-Federal Reserve, so there was no lender of last resort."

He added that “the situation right now is very similar” to those events, emphasizing that the firm is committed to being part of the solution that will result in a consolidation of the broader crypto space.

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While declining to comment on the “ongoing processes,” Trenchev revealed that Nexo has been approached by three “household” Wall Street banks that “are looking to leverage their expertise with the ones that are solvent to help remedy the overall situation.” He added that the crypto space is heading towards, "acquisitions and a consolidation of the space."

Earlier this week, Nexo came up with an offer to acquire “certain remaining qualifying assets” of its struggling rival Celsius, whose sudden move to freeze withdrawals played a significant part in the ensuing market decline.

Until today, neither side had provided further comment on the matter, however, Trenchev now stated that Nexo's plan is to help “remedy the situation for the entire ecosystem.”

The crypto crash and Nexo

Were Celsius, a crypto lending platform with almost $12 billion in assets under management, to become insolvent, it could have a domino effect on the market.

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One of the companies that faces the risk of not being able to meet its liabilities is Three Arrows Capital (3AC). The Singapore-based crypto hedge fund reportedly began selling off assets earlier this week, including $40 million worth of Lido Staked Ethereum (stETH).

In the past, Nexo partnered with 3AC on the development of a non-fungible token (NFT) lending product; however, it never took off.

Nexo stated earlier this week that it currently has no exposure to 3AC, something Trenchev reiterated in his interview with Bloomberg TV. “A few years ago they came to us and asked for an unsecured loan, which we did not feel comfortable providing because it goes against our risk management parameters, and they got it elsewhere,” he said.

Trenchev, however, noted that even though those lenders that gave 3AC unsecured loans should be concerned, he’s “not worried about ripple effects immediately.”

“I think what has happened to them is to a large extent already priced in the selling pressure that we saw on Monday and Tuesday,” said the Nexo chief.

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