NEXO price drops 40% in three days on rumors of ties to 'insolvent' crypto fund

cointelegraph.com:

The price of Nexo (NEXO) continued to fall on June 15, as Nexo denied rumors of exposure to Three Arrows Capital (3AC), a Dubai-based crypto fund facing insolvency risks.

NEXO, which serves as a security token at a cryptocurrency lending platform of the same name, fell nearly 25% to $0.61 a unit, its lowest price reading since January 2021.

The massive intraday decline came as a part of a broader downside move this week, which stretched NEXO's losses to 40%.

An ongoing contagion in the crypto lending sector contributed to NEXO's underperformance.

Traders fear that most DeFi/CeFi firms, which offer high yields to clients on their cryptocurrency deposits, will default on their debts due to the wipeout of nearly $1.5 trillion from the crypto market in 2022. 

The concerns continue to mount after the collapse of Terra, a $40 billion algorithmic stablecoin project, in May.

A month later, Celsius Network, which offers clients up to 18% yields, paused withdrawals due to “extreme market conditions.” Its clients have pulled almost half of their assets out of the platform since October 2021, thus leaving it about $12 billion as of May 17 to meet debt obligations.

I am definitely rooting for Celsius not to get liquidated. That is customer money. And fuck the funds who are hunting this stop loss. I hope they get rekt. #bitcoin

Meanwhile, 3AC, a crypto hedge fund, has witnessed liquidations of at least $400 million. In addition, on-chain data reveals that the firm may also have a minimum debt of $183 million against a collateral position of $235 million (derived in Staked Ether).

The address uses USDT/USDC to repay the debt and withdraws ETH, and then converts ETH to USDT/USDC through "sinofate.eth" and repays it, and so on. In almost 24