Nexo Co-founder: There Is Such Thing as Too Much Transparency
Nexo leaders took to YouTube Tuesday to debunk the myths going around about the lender
Nexo co-founder Kalin Metodiev | Source: Nexo YouTube
- Nexo responded to recent inquiries from investors and regulators that the lender might be in trouble
- The company is not facing solvency issues, the co-founders insisted
Nexo on Tuesday flatly denied growing speculation from investors and regulators that the crypto lender may be in trouble.
Co-founders Antoni Trenchev and Kalin Metodiev insisted Nexo is solvent on a YouTube livestream, organized in an effort to counter a claim from regulators in Kentucky that the firm’s “liabilities would exceed its assets” relatively soon.
“Don’t panic; don’t make conclusions,” Trenchev said. “It’s business as usual for us.”
Metodiev said bankruptcy is “nowhere in Nexo’s reality,” adding that the co-founders are aiming for a “very strong and sustainable future” for customers.
In late September, regulators in eight states — including Kentucky — filed cease and desist orders against the crypto lender. State authorities in California, New York, Maryland, Oklahoma, South Carolina, Washington and Vermont alleged Nexo offered interest-earning accounts without registering the investment products as securities. The yield accounts were marketed and used by retail investors.
Trenchev and Metodiev, who answered investor questions submitted via Twitter, said the company is working closely with regulators on its next steps.
“The good news is…regulators want this product to be in the states,” Trenchev said. “They want to have it there. They’re not looking to shut it down. They are wary, because there were unfortunately some bankruptcies in the past few months, and obviously they have to step up for their mandate for investor protection.”
Several livestream viewers inquired whether Nexo would find itself in a similar situation to now-bankrupt lender Celsius. The quick consensus was a “no.”
“Additional clarity and assurance is beneficial in this, you know, hazy market environment, but at the same time, it’s a little harsh, because I believe that we have demonstrated every single day of Nexo’s existence that we provide an actual service that is based on our technology, and based on a sound business model founded into its risk management protocols, which are uncompromising,” Metodiev said.
While the company intends to provide more insight into its operations, too much transparency, according to Metodiev, can lead investors to make poor decisions and harm the business’s competitive advantage.
“We’ll continue increasing the transparency that needs to be done with a proper degree of duty and responsibility to make sure that this transparency is constructive and beneficial for decision-making purposes,” he said.
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