Insolvency is not in Nexo’s “reality,” co-founder says during AMA

According to the co-founder and managing partner of the cryptocurrency lending platform, Kalina Metodiev, bankruptcy or insolvency is not in the “reality of Nexo”.

In an Ask Me Anything (AMA) video. posted via YouTube on October 4th, founders and managing partners Metodiev and Antoni Trenchev addressed community questions and recent FUD-related rumors that Nexo could soon face insolvency issues.

In response to a question regarding insolvency/bankruptcy rumors and whether Nexo will be “the next Celsius and Voyager”, Metodiev specifically stated that:

“Insolvency, bankruptcy are nowhere in Nexo’s reality and we believe, hope, aspire, [and] we[‘re] work[ing] it is very difficult to ensure a very strong and sustainable future for our users.”

“Looking for similarities with these two names.” [Celsius and Voyager] or other names in the space, is very far from reality and I think it’s very easily verifiable,” he added.

Regarding Metodev’s comments, Trenčev commented: “I didn’t want to mention that [any] names, but I will mention a few names; you know, no exposure to the Terra (LUNA) debacle, absolutely no Three Arrows Capital lending.”

“In the two names that were mentioned in the inquiry, in the bankruptcy filings, you see the list of creditors, Nexo is not on it,” he said.

The rumors appear to stem in part from a Sept. 26 claim by the Kentucky Department of the Treasury that “Nexo’s liabilities would exceed its assets” if its holdings of Nexo tokens (NEXO) were taken out of the equation. . That’s just it one of several cease and desist orders filed against Nexo.

Market analysts such as Dirty Bubble Media author Mike Burgersburg have previously argued that Nexo faces the risk of insolvency because it holds the vast majority of NEXO token supply on its platform, similar to Celsius, which held more than 50% of its native CEL token.

In line with such thinking, sharp drop in the price of NEXO could have a significant impact on society, he argued.

However, a spokesperson for Nexo immediately denied the allegations to Cointelegraph, saying that the data they provided to Kentucky regulators related to one of the Nexo group companies and that “NEXO tokens represent less than 10% of the company’s total assets.”

In an AMA, the Nexo founders also addressed a question about the company recently attestationwhich said Nexo’s $3.7 billion in customer commitments are 100% secured, but gave no further details.

Related: Nexo “surprised” by state regulators’ moves, co-founder says

When asked if the firm plans to “include a breakdown of assets in the attestation rather than just a total dollar amount? Metodiev outlined that Nexo would provide more transparency, but did not outline what that would entail, suggesting the company also needed to balance the need for privacy to fend off competition.

“The greater transparency we can provide will be useful for our community, for our users, for decision makers for investment purposes. We would continue to increase this transparency, but to make sure that this transparency does not reduce our competitive advantage in the first place.”

“I think you know that while we are committed to and will continue to increase transparency, it needs to be done with an appropriate degree of duty and responsibility to ensure that this transparency is constructive and beneficial for decision-making purposes,” he added.