Nexo’s Quick Withdrawal: A Masterstroke
In a remarkable twist of events, crypto lender Nexo has reported having net zero exposure to the ongoing turmoil surrounding cryptocurrency exchange FTX and trading firm Alameda Research. On November 8, they took to Twitter to reveal that they had withdrawn their entire balance of funds from FTX just days before the crisis intensified.
Data Speaks: Over $219 Million Withdrawn
Alex Svanevik, CEO of blockchain analytics platform Nansen, chimed in with data confirming that Nexo had successfully withdrawn over $219 million from FTX in the span of just one week, positioning them as the top entity for fund outflow during this chaotic period.
A Bullet Dodged: What Happened Next?
As fate would have it, on the same day Nexo made their announcement, FTX declared it would halt all non-fiat consumer withdrawals. Nexo, however, remained unfazed, reporting that their exposure to Alameda Research amounted to a small loan, which represented a mere 0.5% of their assets. The silver lining? This loan was fully collateralized by digital assets sold just days prior, ensuring a complete recovery of the principal with no losses incurred.
Nexo’s Conservative Strategy: A Lesson for the Industry
Nexo has displayed a robust approach this year, successfully sidestepping industry-wide risks including those stemming from the collapse of Terra, the woes of hedge fund Three Arrows Capital, and troubles faced by crypto lender Celsius. Their conservative stance on risk management has proven advantageous.
Current Financial Health: Impressive Numbers
According to a real-time audit conducted by certified accounting firm Armanino LLP, Nexo currently oversees more than $3.4 billion in consumer liabilities, with an impressive collateralization ratio exceeding 100%. This means every dollar of liability is fully backed by Nexo’s assets, providing peace of mind to investors.
Conclusion: Nexo’s Road Ahead
Nexo’s proactive measures and strategic withdrawals have not only shielded them from potential catastrophe but have also set a notable example in prudent crypto finances. As the crypto world continues to navigate volatility, Nexo’s disciplined approach could very well serve as a guiding light for others in the industry.
