Zug, Switzerland-based crypto lender, Nexo AG has offered a bailout to acquire Celsius’s collateralized loans as the company recently suspended withdrawals on its platform. The Nexo offer to Celsius is unprecedented but was proven by the company as a way to help Celsius’s customers or clients.
The ongoing slump in the digital currency ecosystem has badly affected Celsius’s business and as contained in a memo shared with customers, the firm shared more insights with respect to the reason why it halted its withdrawals.
“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” the shared memo reads, adding that “Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.”
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While Celsius said clients will continue to accrue interests during the duration of the pause, it did not convince Nexo that the company’s collateralized loan is in dire need of a bailout.
Nexo in Pole Position Back Celsius
Nexo claims it is in the best position to support Celsius amidst this encompassing market downturn, claiming that all of its products, which are in direct competition with those from Celsius are operating normally.
“The Nexo team has never cheered for the failure of any blockchain business but we have warned that operating a sustainable business model based on prudent risk management is what differentiates Nexo and allows us to maintain financial stability in any market circumstances,” the company said, “Nexo is in а solid liquidity and equity position to readily acquire any remaining qualifying assets of Celsius, mainly their collateralized loan portfolio. We are putting together an offer to Celsius to that accord and will communicate it publicly.”
Nexo said the offer has been extended and is billed to expire on June 20th, and within the next week, it is possible Celsius will consider the offer in order not to chart a course that will drive in panic withdrawals like Terra’s UST and LUNA.
