New Rumors Of KuCoin & Nexo Next To Be Bankrupt

Ethereum Crypto Skull
Dead Biting on a Bitcoin (BTC) crypto token
Dead Biting on a Bitcoin (BTC) crypto token

With BlockFi bankrupt and BitFront going out of business, the crypto world is on edge.    More shock-waves of the FTX collapse are expected to be felt.  Coinbase,, and Binance have shown proof-of-reserve (PoR) to keep their brands out of the FOMO.  However, there are new rumors spreading that KuCoin and Nexo crypto-exchanges are heading for bankruptcy.

There is no proof of these claims to date.   Rumors are fueled by recent actions.  Crypto-analysts say there are ‘smoke signals’ in the air.

Why KuCoin Bankruptcy Rumors Started

The top 5 cryptocurrency exchanges in the world are Binance, Coinbase, Kraken, KuCoin, and Binance US.  Of this top group, only the 4th ranked seems to be suffering from a serious ‘bank-run.’

Millions of dollars are being pulled off the KuCoin exchange as FUD spreads across the world on cryptos.    The Seychelles-based crypto company has been pouring out offers to attract new clients, which many social media influencers in the crypto space believe to be a red flag.

The interests of KuCoin could simply be to draw their fair share of the millions of users that are displaced from the FTX collapse and $3-billion debt.  Fair to say the crypto-exchange is making a marketing play to make fast gains on their user base count.

However, analysts and influencers are learning more so to the negative.   The latest offers of KuCoin seem to be overly incentivizing new registrants.   Crypto-influencers believe the move could be a sign of the exchange trying to do ‘whatever it takes’ to get new monetary resources.  Speculators believe if money is needed that badly, there is a serious issue with asset reserves.

KuCoin Reply To The FUD

The world’s 4th biggest crypto-exchange says it will release a PoR (proof of reserves) or proof of assets around December 8th.   An independent audit is currently underway, according to the exchange.

Upon releasing such proof of assets or value of the company, it could easily create a slingshot trajectory forward.     If KuCoin is not at all affected by FTX, it can easily become one of the major brands that ‘own’ the Decentralized currency world in the future.   It will be something like a  “Bank of America” in the world of cryptocurrency and DeFi.

Ethereum Crypto Skull
Ethereum Crypto Skull

Why Nexo Bankruptcy Rumors Started

Secondary bankruptcy rumors flying around the cryptocurrency community revolve around Nexo.   Though it’s a trading platform much smaller than KuCoin, it still claims to handle $15-Billion in assets.  Over 4-million users use the exchange worldwide.

The smoke signals around the crypto-trading company are thick and heavy.

Just last week a report was made that the company froze $126-million-dollars in cryptos of a Fintech family from London. Supposedly, Nexo then intimidated the tech-savvy bunch into selling all cryptocurrency being held, back to the exchange. The sell was at a discount of 60% of the coins value though.

Many believe this case is only 1 case of more to come.

Whistleblower Spoke to CCO Exclusively

A connected industry figure just told exclusively that the exchange looks ready to collapse.  Allegedly Nexo has a business model that’s impossible to support.

“Can’t keep paying 10% yield on stables if the industry average is roughly 1.04%,” said the  whistleblower.

The insider’s information may not be accurate.

And even if accurate, a whistleblower may not be needed at this point  Several sites are reporting similar expectations.

Nexo Response to FUD

Nexo has responded via twitter [ view tweets ] to the rumors.  However, the explanation seems a lot less clear than that of KuCoin.

The crypto-exchange claims their industry-leading offers to be in-line with their original principles.    And it says all loans are backed by real collateral.

One  tweeted example reads:

Example 1: Jane wants to earn interest on $130k in stablecoins (4-8% APY). John wants a Tesla & borrows Jane’s $130k against his $260k in BTC. John transfers the BTC to Nexo & Nexo transfers Jane’s stablecoins to John (13.9% APR). All transactions are collateralized. 

Breakdown of tweet

Still, many are confused on what this means.  In Layman’s terms it appears to means this:

John does not want to take his Bitcoins off the market and he feels the BTC tokens will grow in value by more than 14%; so he seeks a loan in stable coins.

John agrees to pay 13.9% annually to Nexo to find him a person with stable coins to loan.

Nexo takes his coins and holds them as collateral to the stable coins given by Jane.   She gets 4-8% of that 13.9% for taking the loan.   Nexo keeps the remainder for securely facilitating the loan process.

If Bitcoin fails to pass 14% gains annually, both Nexo and Jane still get paid.   And John has to take that loss from the $260k BTC he used as collateral. 

If Bitcoin completely crashes, it’s assumed Nexo will provide the insurance to back the loan.  However, such a scenario is highly unlikely based on real-time stats. 

Both companies are still alive and working today, regardless of rumors.  Both have the potential to survive all fall-outs of FTX.    Nonetheless, the word on the metaverse streets, be careful if you have your money on these 2 exchanges. 

For those that like risks that pay well, pay attention to the native tokens of both.  Survival will mean big profits.

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