Digital asset manager Nexo responded to the news of its rival Celsius pausing withdrawals by tabling a proposal for a buyout of certain of the firm’s liquid assets.
Pointing to “what appears to be the insolvency” of Celsius, Nexo took to Twitter on Monday morning to post a letter of intent outlining its “potential interest” to acquire “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.”
“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,” reads the letter. “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.”
The firm added that—subject to its risk management and collateral requirements—it could “readily acquire from Celsius part or all qualifying, outstanding collateralized loan receivables secured by their corresponding pledged cryptocurrency collateral.”
According to Nexo, the offer will remain in effect for one week—until 4:30 am UTC on June 20, 2022—unless accepted or rejected by Celsius, or withdrawn prior to that time.
Celsius freezes withdrawals
The New York-based Celsius announced that it is freezing all withdrawals and transfers between accounts late on Sunday night. The firm claimed that it is taking this action “to put Celsius in a better position to honor, over time, its withdrawal obligations.”
CEL, the token underpinning the Celsius platform, responded to the announcement by plunging 70% in just one hour from a prior high of $0.49 to $0.15. At time of publication, CEL was changing hands at just under $0.19, per CoinMarketCap.
Meanwhile, Nexo, which shares a similar business model with Celsius, has seen its native token NEXO drop by 25% over the past day.
The developments surrounding Celsius are surely to add add more woes for crypto investors as markets went deeper into the red over the weekend.
Bitcoin (BTC) dropped as much as 23% in value in the last seven days and is currently trading below $24,500, at levels last seen in December 2020.
Other major cryptocurrencies are posting massive losses too, with the likes of Ethereum, Solana, and Polkadot shedding over 30% in value over the week’s span.
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