Nexo has dispelled any fears that it will be infected by Three Arrows Capital’s collapse, a crypto-venture platform.
With Celsius Network’s future still uncertain and just weeks after Terra’s collapse, the crypto sector is seeing another firm’s business teeter on the verge of an untimely demise.
This is what’s swirling around crypto hedge fund 3AC, whose troubles boil down to possible insolvency pegged on reported liquidations by its lenders.
Commenting on 3AC’s potential collapse, pseudonymous crypto analyst degentrading said:
8/x – 3AC is one of the biggest borrowers/clients for the lenders globally. Their collapse would place economic risk on their lenders. Lenders will pay the difference in how much they owe and what they receive when they liquidate their collateral.
— degentrading (@hodlKRYPTONITE) June 15, 2022
Nexo not exposed 3AC
Nexo, reaffirming its status as ‘safe’ from any would-be reverberations, has come out to say it has zero funds exposure to the Singapore-based 3AC.
“Nexo has $0 exposure to Three Arrows Capital. Nexo has always differentiated itself from others as being a very conservative lender with stringent risk management and strict over-collateralization requirements, regardless of borrowers’ reputation,” the firm said.
Indeed, Nexo’s only notable association with the hedge fund is via a partnership on an NFT fund. But in a statement shared on Wednesday, it notes the collaboration that was struck in December 2021 did not work as the fund failed to “take off.”
Nexo also allegedly “declined” a request from 3AC seeking an unsecured credit facility.
Three Arrows Capital has never signed a partnership agreement with Nexo. We currently have $0 in business and no exposure.
— Nexo (@Nexo) June 15, 2022