(Merged) Nexo Proposes Celsius’ Buyout Offer Amid Unfavorable Market Conditions

Nexo, a major cryptocurrency lending platform based in Switzerland, announced on Monday that it made a non-binding proposal to Celsius’s board of directors to acquire certain assets of its rival US-based crypto lending platform, Celsius Network.

Earlier on Monday, Celsius suddenly paused withdrawals, swaps, and transfers between accounts, citing "extreme market conditions." While the firm did not provide a timeline for resuming such services, it mentioned that it was freezing withdrawals and transfers because of extreme market conditions.

In Twitter social media, Nexo stated that it is in a healthy position to buy Celsius’ collateralized loan portfolio, though it did not mention a quoted price. "In а solid liquidity and equity position to readily acquire any remaining qualifying assets of Celsius, mainly their collateralized loan portfolio," Nexo said.

In a formal letter of intent addressed to Celsius on Monday, Zug, Switzerland-based Nexo stated: "Nexo, its partners, and affiliates could readily acquire from Celsius part or all qualifying, outstanding collateralized loan receivables secured by their corresponding pledged cryptocurrency collateral, subject to Nexo’s risk management and collateral requirements."

The proposal is a non-binding bid. The letter noted that the offer is valid until 4:30 a.m., UTC (Coordinated Universal Time) on Monday June 20, unless accepted or rejected by the seller, or withdrawn by the buyer before that time.

Feeling the Heat

Celsius is headquartered in New Jersey, but has offices in London, New York, and Lithuania. On Monday, the crypto lending platform wrote in a memo to clients, stating that because of extreme market conditions, it was pausing all withdrawals, Swap, and transfers between accounts.

Some market participants are now concerned about the ability of the firm to meet its long-term debts and other financial obligations. Celsius is known in the past to have made its name by offering above-average interest rates on deposits.

The value of the digital asset market plunged below $1 trillion after Celsius made the announcement public. The total value of the crypto market fell below $1 trillion on Monday after the sell-off, after valued almost $3 trillion in November last year.

After the Celsius’ announcement, Bitcoin dropped to a 17-month low of $23,880 while Ether plummeted over 15% to $1,250, its lowest since January 2021.

Stocks like MicroStrategy (MSTR), Coinbase (COIN), and the cryptocurrency miners (Marathon Digital (MARA), Riot Blockchain (RIOT), Hut 8 (HUT), among others) are also all reeling lower, down 25% premarket amid the crypto downturn.

Cryptocurrencies have witnessed a significant drop in a market panic over rising interest rates, which has cooled down the appetite for higher-risk assets.