CRYPTO NEWS

BlockFi liquidates major counterparty after it fails to meet margin call

Crypto lending platform BlockFi liquidated a large client after it failed to meet obligations on an overcollateralized margin loan, the company’s founder and CEO Zac Prince announced June 16.

Prince’s disclosure came after Singapore-based crypto hedge fund Three Arrows Capital (3AC) failed to meet margin calls from its lenders following this week’s crash. According to a Financial Times report, BlockFi was among the lenders.

Assuring users of the soundness of BlockFi’s risk management practices, Prince said they allow the company to act decisively to mitigate risk. He divulged that these practices include margin calls and asset liquidation when necessary.

Enforcing strict risk management practices to protect investors

Prince said client funds are safe as BlockFi was one of the first to act after the client failed to meet margin calls. He added that BlockFi continues to lend and operate as usual across the world.

Despite the turmoil in the crypto market, Prince said BlockFi strives to offer its retail customers as much yield as possible. He added that the firm will announce new rates in the coming weeks, which will come into effect fromJuly 1.

The BlockFi executive concluded:

I couldn’t be more proud of how our people, processes, and systems have performed through this period of market volatility. BlockFi is here for our clients, and we’re here for the long haul.

Crypto bears continue devastating industry players

Prince’s reassurance efforts to BlockFi users come after Celsius Network halted withdrawals, swaps, and transfers on its platform on Sunday due to liquidity issues. Celsius has yet to announce a recovery plan.

Meanwhile, Finblox, a Hong Kong-based crypto staking and yield-earning platform, has reduced the monthly withdrawal limit to $1,500 amid mounting fears of 3AC’s possible insolvency.

In a June 16 statement, Finblox — which secured a $3.6 million investment from 3AC in December 2021 — said it reduced the withdrawal limit as it evaluates 3AC’s impact on its liquidity.

The post BlockFi liquidates major counterparty after it fails to meet margin call appeared first on CryptoSlate.

Nexo claims “smear campaign” ignores its attempts to aid insolvent companies

CryptoSlate spoke to Nexo co-founder Antoni Trenchev regarding Nexo’s decision to increase insurance to $775 million, its moves to offer aid to struggling crypto firms, and the recent allegations claiming Nexo is in trouble. Trenchev told CryptoSlate that its move to increase insurance levels was a part of an ongoing plan to improve security unrelated::Listen

CryptoSlate spoke to Nexo co-founder Antoni Trenchev regarding Nexo’s decision to increase insurance to $775 million, its moves to offer aid to struggling crypto firms, and the recent allegations claiming Nexo is in trouble.

Trenchev told CryptoSlate that its move to increase insurance levels was a part of an ongoing plan to improve security unrelated to recent market volatility. Nexo holds assets in custody with third parties which are “fully protected” should “something happens to these assets under the care of our third-party custodians.” Nexo has not had to call on any of the insurances it holds.

Further, Trenchev confirmed that all loans are “strictly collateralized” and claimed it is”the most security-focused lender” in crypto. Amid allegations that Nexo may also be secretly insolvent, Trenchev said its public partnership with its third-party custodians means they “are confident everything is as it should be.”

The Nexo Co-Founder refused to comment on the potential source of recent allegations stating that “the recent noise in the space is anything other than a smear campaign.” In fact, Trenchev declared Nexo is in a solid position compared to others in the industry.

“A few of the better-known companies in the space are seemingly close to insolvency and the community is in turmoil. In stark contrast, Nexo continues to function normally and even has sufficient liquidity reserves to offer aid to these companies– we aim to restore public confidence and help their adversely affected clients and investors.”

In response to the state of Nexo’s offer to acquire Celsius’ assets Trenchev asserted  that “there are several ongoing processes for which Nexo has been approached to help with the provision of liquidity.” Further, Trenchev affirmed that Nexo is “committed to being part of the solution” to restore the reputation of crypto lending.

A recent post by Celsius stated that it is exploring “strategic transactions” to “stabilize” its liquidity issues. Neither party has neither confirmed nor denied that they are in negotiations.

Disclaimer: Nexo is an advertising partner for CryptoSlate.

The post Nexo claims “smear campaign” ignores its attempts to aid insolvent companies appeared first on CryptoSlate.

BlockFi liquidates major counterparty after it fails to meet margin call

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