Nexo is attempting to allay any concerns that its business may be damaged. By the potential failure of crypto venture platform Three Arrows Capital (3AC).

In a statement to Cryptonews.com, the company says: “Nexo has no financial or other exposure whatsoever to 3AC.”

3AC is co-founded by former Goldman Sachs partner Kyle Drake, one of the most prominent players in the cryptocurrency industry.

The firm has raised over $200 million from investors such as Peter Thiel’s Founders Fund and hedge fund manager Alan Howard.

With Celsius Network’s future up in the air and only weeks after Terra’s bankruptcy. Another firm’s business is teetering on the edge of failure in the cryptocurrency industry.

Nexo offers crypto-backed loans and claims to be the “world’s first instant crypto credit line provider.” Says it wants to “clarify its position” following reports that 3AC is facing financial difficulties.

The reports were fueled by a since-deleted tweet from Drake. Who says that 3AC was “facing some challenges and is no longer able to meet its obligations in full.”

In a blog post on Medium, Nexo said it has “no exposure whatsoever” to 3AC. And that all of its loans are backed by “major exchanges and stablecoins.”

This is what’s going on at crypto hedge fund 3AC, which is in peril owing to reported bank liquidations.

Nexo, the largest and most popular instant crypto credit line provider, said it wants to “clarify its position” following reports that 3AC is facing financial difficulties.

Commenting on 3AC’s potential collapse, pseudonymous crypto analyst degentrading in a tweet says “the inability to meet margin is death the death knell for a hedge fund.”

3AC is not a problem for Nexo

The Singapore-based 3AC is yet to make an official statement. But the company has come out against Nexo and reaffirmed its ‘safe’ status from any future repercussions.”

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 states.

Nexo’s only tie to the hedge fund is a collaboration with an NFT fund. However, according to a statement published on Wednesday. The partnership entered into in December 2021 did not work since the fund “failed to take off.”

“Consequently, the agreement between the two parties was terminated in February 2021 and has not been renewed. The NFT fund was never operational,” it says.

The news of 3AC potentially being in hot water started swirling last week. When an anonymous group called “Zerononcense” published a report alleging the firm had been running a fractional reserve scheme.

The report claims that 3AC was leveraging investors’ money to trade on exchanges. While also using those funds to pay off redemptions and interest payments. It further alleged that some of the firm’s clients were high-profile names in the crypto industry.

Nexo, a cryptocurrency lending platform that has recently started offering interest-bearing accounts denominated in BTC, USDT, and other digital assets. Says it has no exposure to the embattled Three Arrows Capital (3AC).

In a blog post published on Tuesday, Nexo addresses “recent market speculation” about its relationship with 3AC.

“Nexo had an operational agreement with 3AC which expired in Jan 2020. Since then, we have had no further commercial dealings or business relationship of any kind with 3AC,” the post reads.

“We want to reiterate that we have zero tolerance for any misappropriation of clients’ funds or fraudulent activity by our partners,” the company adds.

In another tweet, Nexo also allegedly “refused” a request from 3AC seeking an unsecured credit facility.

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James Atkins

I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.