Nexo Proposes Celsius Buyout Amid Withdrawal Suspension

Following reports of the insolvency of Celsius, rival crypto lending firm Nexo is offering a buyout.

Bishal Kumar Chanda3 min read
Nexo Proposes Celsius Buyout Amid Withdrawal Suspension

There seems to be a glimmer of hope for the bear market's most recent victim. Following reports of the insolvency of Celsius, rival crypto lending firm Nexo is offering a buyout.

Celsius Network Pauses Withdrawals and Transactions

On Sunday, the New York-based Celsius Network announced freezing all withdrawals and transfers on its platform. Citing the current market downturn, the firm claimed it was a necessary step "to put Celsius in a better position to honor, over time, its withdrawal obligations."

Celsius Pauses Withdrawals and Transactions

"We are working with a singular focus: to protect and preserve assets to meet our obligations to customers," reads a Celsius blog post.

"Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options, this process will take time, and there may be delays."

Nexo Offers Buying Out Celsius Assets

Meanwhile, rival firm Nexo took to Twitter on Monday to post a letter of intent that outlined its "potential interest" in acquiring "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."

In brief, Nexo will absorb all of Celsius' loans to gain its customer database of over 1.7 million users. Also, Nexo has given the Celsius team 7 days to respond, with the proposal terminating on June 20.

However, the Celsius team rejected Nexo's first call to help on June 12. "Yesterday [June 12], we reached out to the Celsius team to offer our support, but our help was refused," said Nexo.

Nexo proposes Celsius buyout

"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," the letter read.

"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."

Regarding risk management and collateral requirements, Nexo added that it could "readily acquire from Celsius part or all qualifying, outstanding collateralized loan receivables secured by their corresponding pledged cryptocurrency collateral."

Celsius and Nexo Token Prices Shaken By The Falling Crypto Market

Following Sunday's announcement, Celsius's native token CEL has plummeted as low as $0.31. Moreover, the token plunged by 70% in just one hour, from a prior high of $0.49 to $0.15. After rallying above $1.10 on Tuesday, CEL is changing hands at just under $0.53.

Meanwhile, Nexo, which has a similar business model as Celsius, saw its native token NEXO fall nearly 25% to $0.61. In fact, it is the token's lowest price reading since January 2021.

Also, the massive intraday decline is part of the broader downside move this week, stretching NEXO's losses to 40%. Currently, the price has rebounded to $0.735, and the subsequent interim upside target could be $0.883.

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