Nexo is dispelling any fears that its business will likely suffer contagion arising from the potential collapse of crypto venture platform Three Arrows Capital (3AC).
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 transfer the economic risk to their lenders. The lenders will bear the pnl difference between how much they are owed versus what they get in liquidating their collateral
— degentrading (@hodlKRYPTONITE) June 15, 2022
Nexo not exposed to 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.
All Nexo has ever done with Three Arrows Capital is sign a partnership with their NFT fund, but it did not take off and we currently have $0 business and exposure with them.
— Nexo (@Nexo) June 15, 2022