City-AM reports that the lending platform Nexo illegally blocked a $126 million withdrawal. The corpses are coming out of the closets following the bankruptcies of Celsius, Voyager and BlockFi.
Nexo sued in London
The plaintiffs claim that the lending platform threatened to block their funds.
According to the complaint lodged in the High Court in London, “On March 22, 2021, Nexo – without notice or explanation – imposed daily withdrawal limits on these investors, preventing them from withdrawing more than $150,000 per day.”
“On March 23, 2021, Nexo fully blocked investors’ assets by graying out their withdrawal buttons”adds City AM.
“On the same day, Nexo also prevented the conversion of their Nexo tokens into other cryptocurrencies by disabling conversion buttons “, can we read further.
CityAM then reveals that Nexo has “intimidated” its investors to force them to write off 60% of their 39 million nexo tokens. Or 3.9% of the billion existing tokens, representing 126 million dollars at the time.
Nexo said it froze its investors’ accounts for “support the price of the nexo token”according to documents filed with the High Court.
The famous “native token” sold to “investors” and distributed free of charge to insiders:
Additionally, Nexo is also under investigation in the state of Kentucky.
Customer testimonials
Suspicions against Nexo thicken as the testimonies pour in.
Dominique Anger was not an investor, but a simple client. She recounts her misadventure:
“I signed up for NEXO on March 25, 2021. I deposited 23,000 euros in cash there and bought 2,000 euros worth of cryptos. Everything was going very well until October 2022. I didn’t go to NEXO often, only occasionally from my phone with my personal four-digit code to check the evolution of crypto prices. The 23,000 euros being blocked until October 22 on an internal NEXO account generating interest.
On October 15, 2022, I wanted to connect to NEXO but my password did not work, I alerted NEXO. And there, it took two weeks of unsuccessful attempts to reset the 2FA, send three KYCs and change the email address. When, finally, I managed to connect on October 24, I had the very bad surprise to find my account completely empty! »
To this day, NEXO still refuses to provide IP addresses as well as data relating to the addresses or bank accounts to which the funds were transferred. “Seeing no progress in my requests to Nexo, I report the case to the Swiss Ombudsman”warns Dominique.
William (@LemondeduBTC) says for his part:
“Following recent events, I have decided to clean up the few exchanges where I have a little bitcoins left. Exchange 1 okay. Exchange 2 okay. Then comes the turn of Nexo. I try a first time with the full amount, error message. I divide the sum in two, it tells me to try again later, which I do for 48 hours without success. Not wanting to leave this money blocked, I go through a stablecoin and there, the withdrawal request works right away. Fractional reserve in BTC? »
It is not the first exchange that refuses to immediately return its customers’ bitcoins. Yours truly was able to see this no later than last week with Coinbase. The American wouldn’t let me convert USDT to BTC. It took me 3 days to be able to withdraw the USDT.
The modus operandi is often the same: pretexting the absence of KYC (Know your costumer) data to block funds.
Brian Armstrong, the CEO of Coinbase, claims that his exchange holds two million BTC. True, but how many of these BTCs does the exchange lend to third parties?
As we explained in this article, leaving your BTC on exchanges amounts to shorting bitcoin:
“Letting exchanges lend BTC to their customers is the same as printing BTC. The supply of BTC is artificially inflated, which automatically weighs on prices. The more BTC there are on the exchanges, the more it is possible to create IOUs. »
All this to say that it is imperative to transfer your BTC to your own wallet. Not your key, not your coin!
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