Crypto Lender Nexo’s Co-Founders Rebuff Insolvency Speculation

Carly Wanna, Bloomberg News

Kalin Metodiev, co-founder and managing partner at Nexo, speaks during the Bitcoin 2022 conference in Miami, Florida, U.S., on Wednesday, April 6, 2022. The Bitcoin 2022 four-day conference is touted by organizers as "the biggest Bitcoin event in the world." , Bloomberg

(Bloomberg) -- Nexo Inc. officials rebuffed speculation that the crypto lender is headed for bankruptcy on the heels of other high-profile insolvencies in the digital-asset industry.

The co-founders of Nexo addressed a series of inquiries during an ‘Ask-Me-Anything’ YouTube video on Tuesday. An anonymous user asked Antoni Trenchev and Kalin Metodiev whether their lending platform could be the next Celsius Network Ltd. or Voyager Digital Ltd., both of which filed for bankruptcy earlier this year.

“Insolvency, bankruptcy are nowhere in Nexo’s reality,” Metodiev said. “We work very hard that we deliver a very strong and sustainable future for our users for many years to come, enriched with a number of additional services and products through integration of technology and disruption of existing services.”

Trenchev reiterated that the company had “no exposure to the Terra and Luna debacle” and did not lend to the bankrupt crypto hedge fund Three Arrows Capital. The founders added that they are eyeing expansions into industries like trading as well as development of wealth and asset management solutions in traditional capital markets.

Last month, regulators from eight US states -- California, Kentucky, Maryland, New York, Oklahoma, South Carolina, Vermont, and Washington -- said Nexo was offering interest-earning accounts without registering the investment products as securities. The states filed cease and desist orders against Nexo, whose yield accounts were marketed and used by retail investors.

Asked about the cease-and-desist orders, Trenchev said they have been interacting with regulators to provide information in a timely fashion.