Nexo blocks user withdrawals

In recent months, the cryptocurrency lending company Nexo, which has been buying up struggling companies for some time, has been running into problems itself. In any case, this is demonstrated by a report resulting from an analysis of the company’s deposits. It indicates that since May, the turnover of the company has decreased and that as a result, the latter could block withdrawals from users.

The difficulty of Nexo

A new report published on the company Nexo shows that the value of digital assets that have been deposited by customers has decreased in recent months. While it was 6.9 billion dollars on May 12, it is increased to $3.9 billion Thursday, July 21. This recorded decrease corresponds to a decrease of almost 44%.

Strangely, during this relatively difficult period for Nexo, the bitcoin (BTC) fell by about 20%. The second largest cryptocurrency, ether (ETH), also fell 22%. Therefore, analysts deduce that the decrease in Nexo deposits is due to the fall in value of certain cryptocurrencies. However, that wouldn’t matter. “It’s a very natural behavior, given the state of the market,” notes Vetle Lunde, an analyst at research firm Arcane Research.

Blocking withdrawals

Analyst Lunde mentioned another reason that could justify the behavior of Nexo’s customers. “They are cautious given the shaky market conditions and bankruptcies affiliated with other major retail-oriented cryptocurrency lending platforms.” According to a company spokesperson, “exits from the platform are proportional to the volatility of the cryptocurrency space”. He adds that they [les sorties, NDLR] are relatively normal for such a bumpy time.

Clearly, the crash in cryptocurrency prices continues to have effects on market participants, be they investors or businesses. In the case of Nexo, the company reportedly decided to block user withdrawals from the platform.

Like many other cryptocurrency companies, Nexo is struggling financially. Indeed, the deposits it records are decreasing more and more, which makes us fear the worst. To deal with this, the company could decide to block customer withdrawals in order to regain its stability and continue its expansion.

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