{"id":497280,"date":"2022-09-30T19:41:15","date_gmt":"2022-09-30T16:41:15","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/nexo-risks-50-drop-due-to-regulatory-pressure-and-investor-concerns\/"},"modified":"2022-09-30T19:41:15","modified_gmt":"2022-09-30T16:41:15","slug":"nexo-risks-50-drop-due-to-regulatory-pressure-and-investor-concerns","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/nexo-risks-50-drop-due-to-regulatory-pressure-and-investor-concerns\/","title":{"rendered":"# NEXO risks 50% drop due to regulatory pressure and investor concerns"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3ed77b31e8d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3ed77b31e8d\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/nexo-risks-50-drop-due-to-regulatory-pressure-and-investor-concerns\/#%E2%80%9D_NEXO_risks_50_drop_due_to_regulatory_pressure_and_investor_concerns_%E2%80%9C\" >&#8221; NEXO risks 50% drop due to regulatory pressure and investor concerns &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/nexo-risks-50-drop-due-to-regulatory-pressure-and-investor-concerns\/#Is_Nexo_too_centralized\" >Is Nexo too centralized?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/nexo-risks-50-drop-due-to-regulatory-pressure-and-investor-concerns\/#Comparisons_with_Celsius\" >Comparisons with Celsius<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/nexo-risks-50-drop-due-to-regulatory-pressure-and-investor-concerns\/#NEXO_price_could_get_rocky\" >NEXO price could get rocky<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_NEXO_risks_50_drop_due_to_regulatory_pressure_and_investor_concerns_%E2%80%9C\"><\/span>&#8221; NEXO risks 50% drop due to regulatory pressure and investor concerns &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-6ebd806f>Crypto lending firm Nexo (NEXO) risks losing half of its valuation by the end of 2022 as doubts about its potential insolvency grow in the market.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_Nexo_too_centralized\"><\/span>Is Nexo too centralized?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>For the unversed: eight U.S. states filed a cease-and-desist order against Nexo on Sep. 26, alleging that the firm offers unregistered securities to investors without alerting them about the risks of the financial products. <\/p>\n<p>In particular, the regulators in the state of Kentucky\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/kfi.ky.gov\/Documents\/SECU%202022-AH-0020%20Nexo%20Inc_.pdf\">accused<\/a> Nexo of being insolvent, noting that without its namesake native token, NEXO, the firm&#8217;s &#8220;liabilities would exceed its assets.&#8221; As of July 31, Nexo had\u00a0959,089,286 NEXO in its reserves. That&#8217;s 95.9% of all tokens in existence.<\/p>\n<p>&#8220;This is a big, big, big problem because a very basic market analysis demonstrates that Nexo would be unable to monetize a significant chunk of these tokens,&#8221; <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/dirtybubblemedia.substack.com\/p\/is-nexo-nexto\">noted<\/a>\u00a0@MikeBurgersburg, an independent market analyst and author of the Dirty Bubble <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Media<\/a> Substack, adding: <\/p>\n<blockquote><p>&#8220;Given that fact, the true value of the $NEXO tokens on Nexo\u2019s balance sheet is likely close to $0.&#8221;<\/p><\/blockquote>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">NEW: \u201cIS NEXO NEXTO?\u201d<\/p>\n<p>According to state regulators, Nexo is insolvent without counting <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24NEXO&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$NEXO<\/a> tokens on their balance sheet.<\/p>\n<p>This is the same situation Celsius Network was in\u2026 and basic market analysis suggests real value of their <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24NEXO&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$NEXO<\/a> is ~$0 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/txt1kOSydH\">https:\/\/t.co\/txt1kOSydH<\/a><\/p>\n<p>\u2014 dirtybubble.usd (@MikeBurgersburg) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/MikeBurgersburg\/status\/1574931749557391361?ref_src=twsrc%5Etfw\">September 28, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Comparisons_with_Celsius\"><\/span>Comparisons with Celsius<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>@MikeBurgersburg also alleged that Nexo faces insolvency risks because it holds the maximum chunk of NEXO token supply onto its platform. His allegations drew comparisons to Celsius Network, a now-defunct crypto lending firm that owned more than 50% of its native token,\u00a0CEL.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-09\/8b903cc4-f9c2-4b4c-a32a-d6861ece185a.png\"><figcaption style=\"text-align: center;\"><em>Top 100 NEXO holders collectively own 95.53% token supply. Source: Etherscan.io<\/em><\/figcaption><\/figure>\n<p>Celsius ended up holding over 90% of the total CEL tokens in circulation after attracting deposits and collateral from customers. This made CEL extremely illiquid and, thus, volatile. In other words, CEL became a deeply imperfect asset for patching Celsius&#8217;s troubling balance sheets.<\/p>\n<p>&#8220;NEXO token is even more illiquid than the bankrupt Celsius Network\u2019s CEL token,&#8221; warned\u00a0@MikeBurgersburg, noting that the token&#8217;s average daily trading volume comes to be less than 1% of its market capitalization.<\/p>\n<p>But one of the Nexo spokespersons denied the allegations, clarifying that the data they provided to Kentucky regulators is of one of the Nexo Group\u2019s entities.\u00a0<\/p>\n<p>&#8220;We can confirm that on a consolidated basis, NEXO Tokens represent less than 10% of the company&#8217;s total assets,&#8221; he told Cointelegraph, adding:<\/p>\n<blockquote><p>&#8220;That, in return, exceeds the company liabilities even when excluding the company&#8217;s net position in NEXO Tokens.&#8221;<\/p><\/blockquote>\n<p>Answering why Nexo holds more than 90% of their NEXO supply, the firm&#8217;s spokesperson cited the token&#8217;s economics and utilities, saying that they create a natural incentive for clients to keep their tokens on the platform.<\/p>\n<p>&#8220;In addition to earning higher interest rates on their digital asset balances by holding NEXO Tokens on the Nexo platform, clients can use NEXO Tokens as collateral, earn interest on them and exchange them directly on the Nexo platform,&#8221; he explained, adding: <\/p>\n<blockquote><p>&#8220;The same is true for the tokenomics of companies with similar value propositions such as FTT, BNB, CRO, held predominantly on FTX, Binance, and Crypto.com respectively.&#8221;<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"NEXO_price_could_get_rocky\"><\/span>NEXO price could get rocky<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The fear, uncertainty and doubt surrounding the rumors of market volatility or stringent regulation against crypto lending platforms could create negative investment sentiments toward NEXO. Unfortunately, the token&#8217;s technical setup suggests the same.<\/p>\n<p><strong><em>Related:\u00a0Nexo acquires stake in US chartered bank<\/em><\/strong><\/p>\n<p>Notably, NEXO&#8217;s price has been forming what <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears to be an ascending triangle on its longer-timeframe charts since June 12. Ascending triangles are considered bearish continuation patterns in a downtrend, which makes NEXO susceptible to extreme price declines.<\/p>\n<p>By the rule of technical analysis, an ascending triangle resolves after the price breaks below its lower trendline and continues falling in the same direction until it reaches the level that is at length equal to the triangle&#8217;s maximum height. <\/p>\n<p>This setup is illustrated in the chart below.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-09\/a1a4caef-28ff-4917-90f2-8faaf7b25a9f.png\"><figcaption style=\"text-align: center;\"><em>NEXO\/USD three-day price chart featuring ascending triangle breakdown setup. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>In the event that the pattern confirms, NEXO price could fall toward $0.47, down about 50% from today&#8217;s price.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<p class=\"post-content__disclaimer\">The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.\n<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/nexo-risks-50-drop-due-to-regulatory-pressure-and-investor-concerns\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; NEXO risks 50% drop due to regulatory pressure and investor concerns &#8220; Crypto lending firm Nexo (NEXO) risks losing half of its valuation by the end of 2022 as doubts about its potential insolvency grow in the market. Is Nexo too centralized? For the unversed: eight U.S. states filed a cease-and-desist order against Nexo&#8230;<\/p>\n","protected":false},"author":1,"featured_media":497281,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDkvNzBkNTI5ZTItMzM1Ni00ZjFhLWJiMDQtZGNhYzQ4NzNlZDk0LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,88119,77595,74939,75164,78261,73785],"class_list":["post-497280","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-altcoin-watch","tag-lending","tag-market-analysis","tag-price-analysis","tag-tech-analysis","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/497280","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=497280"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/497280\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/497281"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=497280"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=497280"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=497280"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}