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Nexo Safeguarded User Funds From FTX, but the Platform is Doing Something Unusual

2 mins
Updated by Kyle Baird
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In Brief

  • The FTX group filed for Chapter 11 of the United States Bankruptcy code.
  • Nexo withdrew over $219 million from FTX before the exchange went insolvent.
  • A well-known crypto analyst has pointed out unusual activity today with FTX.
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Nexo, the lending platform, withdrew $219 million from FTX before it paused withdrawals and went insolvent. But there is something unusual taking place.

According to the most recent press release, the FTX group has filed for Chapter 11 of the United States Bankruptcy code. There were speculations if Nexo, the platform where users can avail of instant cryptocurrency-backed loans, had exposure to FTX.

Earlier, the platform had some of its assets in custody with FTX.  But according to a tweet from Nexo, it now has zero exposure to FTX or Alameda. 

Does Nexo have the best risk management team in the world?

The lending platform claims to have safeguarded all funds by withdrawing their balances from FTX over the past few days. Alex Svanevik, the CEO of Nansen, an on-chain analytic platform, confirmed that Nexo withdrew over $219 million from FTX.

Source: Twitter

Nexo had zero losses in the entire FTX episode. According to its tweets, they never restricted withdrawals or needed financial help. They further mentioned that they had no exposure to UST/Luna, Three Arrow Capital, Celsius, etc. The community believes that Nexo has the best risk management team in the world.

Renowned crypto analyst points out some unusual activity.

Satoshi Stacker, a popular YouTuber and a crypto analyst, has pointed out that around $85 million have been transferred from Nexo to Binance in the last 20 hours. The community fears there are more domino stones to fall.

However, Kiril Nikolov, a sales executive at Nexo, has clarified that it was just a standard operational transfer to a safe exchange (Binance) to facilitate customer trading and liquidate collateral. The balances withdrawn from FTX needed to move to “safe” exchanges to support trading activities.

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Harsh Notariya
Harsh Notariya is a journalist at BeInCrypto, who writes about various topics, including decentralized physical infrastructure networks (DePIN), tokenization, crypto airdrops, decentralized finance (DeFi), meme coins, and altcoins. Before joining BeInCrypto, he was a community consultant at Totality Corp, specializing in the metaverse and non-fungible tokens (NFTs). Additionally, Harsh was a blockchain content writer and researcher at Financial Funda, where he created educational reports on...
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