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Nexo claims “smear campaign” ignores its attempts to aid insolvent companies

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CryptoSlate spoke to Nexo co-founder Antoni Trenchev regarding Nexo’s decision to increase insurance to $775 million, its moves to offer aid to struggling crypto firms, and the recent allegations claiming Nexo is in trouble.

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Trenchev told CryptoSlate that its move to increase insurance levels was a part of an ongoing plan to improve security unrelated to recent market volatility. Nexo holds assets in custody with third parties which are “fully protected” should “something happens to these assets under the care of our third-party custodians.” Nexo has not had to call on any of the insurances it holds.

Further, Trenchev confirmed that all loans are “strictly collateralized” and claimed it is”the most security-focused lender” in crypto. Amid allegations that Nexo may also be secretly insolvent, Trenchev said its public partnership with its third-party custodians means they “are confident everything is as it should be.”

The Nexo Co-Founder refused to comment on the potential source of recent allegations stating that “the recent noise in the space is anything other than a smear campaign.” In fact, Trenchev declared Nexo is in a solid position compared to others in the industry.

In response to the state of Nexo’s offer to acquire Celsius’ assets Trenchev asserted  that “there are several ongoing processes for which Nexo has been approached to help with the provision of liquidity.” Further, Trenchev affirmed that Nexo is “committed to being part of the solution” to restore the reputation of crypto lending.

A recent post by Celsius stated that it is exploring “strategic transactions” to “stabilize” its liquidity issues. Neither party has neither confirmed nor denied that they are in negotiations.

Disclaimer: Nexo is an advertising partner for CryptoSlate.

Nexo has increased its insurance recently to over $700M what was the catalyst for this?

There was no specific catalyst, rather Nexo continuously dedicates efforts to increasing its insurance and various other security features.This was an ongoing process for many months through our partnerships with BitGo, Ledger, Fireblocks, Bakkt and other custodians, which came into fruition now.

How does the insurance work? Under what conditions would a customer receive a payout?

The insurance applies to all custodial assets on Nexo. Our custodians maintain segregated wallets for each of their clients – a security architecture engineered to prevent breaches affecting more than one wallet. This means that in the event that something happens to these assets under the care of our third-party custodians, Nexo and our clients by proxy would be fully protected.

How does the insurance work? Under what conditions would a customer receive a payout?

The insurance applies to all custodial assets on Nexo. Our custodians maintain segregated wallets for each of their clients – a security architecture engineered to prevent breaches affecting more than one wallet. This means that in the event that something happens to these assets under the care of our third-party custodians, Nexo and our clients by proxy would be fully protected.

Have you had to use this insurance at any time to date?

No. Nexo has an impeccable track record for security and risk management, we have never been hacked or lost clients’ funds, and thus have never had to rely on our insurance.

Does this insurance give Nexo a competitive edge against its competition?

This type of insurance is fairly common in the blockchain space, yet Nexo is one of the players with the highest insurance on custodial assets, distinguishing us from our competition. This along with our other fundamental practices like strictly collateralized loans, a third-party real-time attest of our finances, prudent risk management, and the proactive procuring of licenses globally, has earned us the reputation of the most security-focused lender.

Does this insurance give Nexo a competitive edge against its competition?

This type of insurance is fairly common in the blockchain space, yet Nexo is one of the players with the highest insurance on custodial assets, distinguishing us from our competition. This along with our other fundamental practices like strictly collateralized loans, a third-party real-time attest of our finances, prudent risk management, and the proactive procuring of licenses globally, has earned us the reputation of the most security-focused lender.

How can users who say “they’d never pay out, its just an advertising gimmick” be reassured the insurance is a real backstop to investing their funds in centralized platforms?

Announcing a partnership in general is a pretty substantial commitment. So for some of the leading institutions in the space like BitGo, Fireblock, Bakkt and Ledger – the names speak for themselves – to publicly work with Nexo means all these entities have done their due diligence on our business and are confident everything is as it should be. Beyond our work with the aforementioned custodians, Nexo also has collaborations with the likes of MasterCard, Fidelity, and many other household names. These institutions are not ones that would permit us to idly use their names.

Do you believe there is a targeted campaign against Nexo at present? If so do you have any comment on who that might be and why?

It would appear so, wouldn’t it? We find it hard to define the recent noise in the space as anything other than a smear campaign. There’s little sense in speculating over who might be behind it. Rather than engaging in fruitless Twitter wars, that, frankly, this situation does not have the traction to warrant, our team is focusing its efforts on providing the stability our industry needs right now. What’s more, we’re using this market downturn wisely – through continuous product development and active recruitment while others are laying off.

A few of the better-known companies in the space are seemingly close to insolvency and the community is in turmoil. In stark contrast, Nexo continues to function normally and even has sufficient liquidity reserves to offer aid to these companies– we aim to restore public confidence and help their adversely affected clients and investors. Nexo is working with top-tier advisors from traditional finance and we are poised to be a key player in what appears to be coming, namely, a mass consolidation of the crypto space.

Have you received any further info regarding your offer to Celsius?

There are several ongoing processes for which Nexo has been approached to help with the provision of liquidity for those facing solvency issues but cannot currently comment on the details. We are, however, committed to being part of the solution that will result in a consolidation of the space and the restoring of best practices in lending.

Connect with Antoni Trenchev

https://cryptoslate.com

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