Nexo announced today that it is in talks with Citigroup as it seeks to shore up the crypto lending space. Citigroup is set to act as a financial advisor.
Thanks to this new relationship with Citigroup and the vast expertise of its investment arm, Nexo Ventures, Nexo has both the liquidity and the market know-how to lead a successful consolidation in the crypto lending industry.
The crypto lending sector in particular has proven to be in dire need of liquidity amid the ongoing turmoil in the crypto space. A number of crypto lenders like Celsius have faced the risk of insolvency as crypto prices have fallen over the past few weeks.
Since the cryptocurrency industry does not have a central body similar to the Federal Reserve which acts as a last resort for financial institutions at risk of insolvency, the massive consolidation of the crypto industry by through mergers and acquisitions (M&A) becomes the means of least resistance for the remaining solvent players.
Stability for companies facing insolvency
Nexo has made numerous acquisitions in the recent past, with the primary goal being “to instill stability in businesses facing insolvency and, more importantly, to protect retail investors and others who would otherwise be hardest hit.” affected by the failure of several crypto. lenders” to repay their deposits on demand.
According to Nexo co-founder and managing partner, Antoni Trenchev:
“We have been approached by several Wall Street banks and have decided to formally explore acquisition opportunities to help stabilize our fledgling industry. At Nexo, we have long advocated for the implementation of prudent practices and business models. sustainability in our industry, as a result of which the company amassed a war chest to be used in such aid deals.
Nexo has been looking for crypto companies that have been affected by recent crypto market conditions and Citigroup could be a great partner, especially as a fanatical advisor.