Nexo Review, Usage Tips and Referral Benefits

Company

Nexo is one of the world’s leading digital assets institution. The Nexo platform was launched on 30 April 2018, and it recently celebrated its 5th birthday in 2023. Check out the Youtube AMA session to commemorate this milestone.

One of Nexo’s advantages as a CeFi institution is that it acts as a bridge between the traditional financial world that does not offer a good yield and the wild wild west of DeFi which does but it comes with higher levels of risks in many aspects. Nexo offers both security and high yields.

Business Model

Nexo’s main strategies are market-neutral like collateralized lending, basis trading, and market making, among others.

Pillars to ensure robustness of Nexo’s products, and the safety of client funds include:

• collateralized lending
  • even the largest and most trusted institutions do not receive credit from Nexo without sufficient collateral.
• fully-automated processes
• worldwide licensing
• prudent risk management
• real-time audit on Nexo’s reserves

Corporate Social Responsibility (CSR)

• Nexo “Crypto for Ukraine” Impact: Humanitarian Aid & Sustainable Actions [Jun 2022]

Key metrics

• 5+ million users worldwide [Dec 2022]
• Already processed $30+ billion for over 1.5 million users across more than 200 jurisdictions. [Sep 2021]

Notable developments

• Nexo becomes a member of Association of Certified Sanctions Specialists (ACSS) [Jul 2023]
  • ACSS is a professional membership body for sanctions professionals worldwide. It advances sanctions compliance by supporting the professional development of those leading such efforts, as well as other businesses rely on ACSS to assist them with their sanctions compliance needs.
• Completed the Service and Organization Controls (SOC) 2 Type 2 Compliance audit [Jul 2023]
• Nexo Reaches Landmark Resolution with U.S. Regulators [19 Jan 2023]
  • The sole allegation has been that Nexo’s Earn Interest Product (EIP) was an unregistered securities offering.
  • The U.S. Federal Regulators do not contend that Nexo engaged in any fraud, or misleading business practices, or that any Nexo customers have been harmed or misled about Nexo’s financial health.
• acquired a stake in Summit National Bank [Sep 2022]
  • a US federally chartered bank regulated by the Office of the Comptroller of the Currency
  • acquisition will enable Nexo to offer US retail and institutional clients bank accounts, asset-backed loans, card programs, as well as escrow and custodial solutions.
• launch of Nexo Pro [Aug 2022]
  • advanced exchange featuring limit orders, margin trading, futures, and automated strategies
• Nexo Sues Former Director Over $7.9M Trading Loss [Aug 2022]
  • Nexo was locked out of a BitMEX account connected to its former director, resulting in $7.9 million in losses.
• launched Nexo Card together with Mastercard. The ‘world’s first’ crypto-backed payment card [Apr 2022]
• announced the official launch of Nexo Prime [Apr 2022]
  • proprietary prime brokerage platform for institutional, corporate, and high-net-worth investors
• announced Nexo Ventures [Mar 2022]
  • a $150M in-house venture fund
  • will be led by Tatiana Metodieva, CFA, Nexo Head of Corporate Finance and Investments.
  • areas of focus include Web3; DeFi innovation; Metaverse, NFTs & GameFi; payment & trading infrastructure; and compliance solutions for more effective regulatory alignment.
• acquisition of a stake in Texture Capital [9 Nov 2021]
  • Nexo unveiled the acquisition of a stake in Financial Industry Regulatory Authority (FINRA) member and SEC-registered broker-dealer Texture Capital as part of the latter’s seed funding round.
  • Founded in 2019, Texture Capital offers a regulated, blockchain-enabled marketplace that caters to accredited and institutional investors, while also enhancing private capital liquidity. The company has a unique competitive advantage being one of a handful of broker-dealers licensed for issuance and trading of Digital Asset Securities in addition to being registered in all 50 US states as well as several territories.
  • In a nutshell, the deal could make Nexo the first-ever crypto lender to have a broker-dealer licence.

Presence in Singapore

Unknown

Regulatory compliance

In order to ensure the provision of their portfolio of services in full compliance with all applicable global and local regulations and standards, the Nexo companies hold licenses and registrations (>50 as of Dec 2022) in numerous jurisdictions worldwide.

On 24 May 2022, Nexo announced its official participation in TRUST, the Travel Rule Universal Solution Technology. TRUST is an industry-driven solution for top-tier compliance with The Bank Secrecy Act also known as the “Travel Rule”.

Monetary Authority of Singapore (MAS)

Licensing status: Unknown

Other regions

Might not be a complete list:

• Dubai: Nexo’s Dubai entity, Nexo DWTC, has been awarded an Initial Approval from Dubai’s Virtual Assets Regulatory Authority (VARA) for a vast range of virtual asset service activities. [Mar 2024]

Other regulatory notes

Nexo is a member of Association of Certified Sanctions Specialists (ACSS), which is a professional membership body for sanctions professionals worldwide.

It advances sanctions compliance by supporting the professional development of those leading such efforts, as well as other businesses rely on ACSS to assist them with their sanctions compliance needs.

Certifications

• CSA STAR Level 1 Certification [Sep 2023]
• Asset storage
  • CCSS Level 3 Cryptocurrency Security Standard
• ISO/IEC 27001:2013 Certified Information Security Management System certification.
• ISO 27017 and ISO 27018 (privacy-specific international standard) certifications [Jan 2024]
• Service and Organization Controls (SOC) 2 Type 2 compliant
  • SOC 2 report focuses on addressing risks related to data handling and access. Emphasizes how an organization implements and manages controls to mitigate identified risks throughout the various aspects of its operations.
  • Unlike SOC 2 Type 1, Type 2 certification assesses the effectiveness of these security controls over an extended period of time.

Reviews

• TrustPilot: Nexo
  • Verified company
  • Average 4.5 stars and graded ‘Excellent’ from 9091 reviews [Jun 2022]

Transparency

Shared in November 2022:

• 100%, Fully-backed Reserves: reserves are verified in real time by a reputable, independent third party – PCAOB-certified auditor and leading US accounting firm Armanino LLP
• The NEXO Token Represents Less than 10% of Assets: the NEXO Token makes up less than 10% of the group’s assets and Nexo has never borrowed funds using it as collateral

See “Nexo’s Guiding Principles for Always Keeping Your Assets Safe” for more details.

Ecosystem

NEXO Token

NEXO Tokens are a fundamental part of the Loyalty Program – more tokens in the Nexo Wallet mean higher yields on savings and lower interest for your credit line.

Nexo Booster

A leverage product on the Nexo platform. Learn more from Nexo’s blog article “The Nexo Booster: How & Why to Use It + a Quick Q&A”.

Nexo Earn

The flagship feature of the Nexo platform, offering compounding interest payouts. Additional interest is payed out if users opt to receive them in NEXO tokens.

Schemes:

• FLEX:
  • daily payouts
  • withdraw funds at any time
  • no minimum contribution
• Fixed:
  • offers the highest savings yields available on Nexo

Аssets held in the Credit Line Wallet (i.e. assets being used as collateral) won’t earn interest with the exception of the NEXO Token.

Nexo Exchange

The Nexo Exchange lets you buy, sell, and convert your crypto and FiatX all from the Nexo Wallet App or Nexo platform.

Nexo supports 200+ market pairs, and fixes the rate the moment you place your order. That means the price you see is the price you pay.

Nexo is connected to multiple trusted and well-capitalized exchanges, allowing them to give users a quote based on the best spot price and volumes. This means you always get the best available price on the market.

Nexo Loyalty Program

The Nexo Loyalty program is a four-tier system, comprising Base, Silver, Gold, and Platinum levels, which extends benefits depending on the amount of NEXO Tokens you hold across your Nexo Savings and Credit wallets, as combined in the Portfolio Balance.

The requirements for each tier are as follows:

• Base: No NEXO Tokens are needed
• Silver: At least 1% of the Portfolio Balance in your account must comprise NEXO Tokens
• Gold: At least 5% of the Portfolio Balance in your account must comprise NEXO Tokens
• Platinum: At least 10% of the Portfolio Balance in your account must comprise NEXO Tokens

Loyalty Benefits

• reducing borrowing rates for the Instant Crypto Credit Lines
• increasing yields with the Earn on Crypto & FiatX suite
• increasing the number of free crypto withdrawals per calendar month
• earn cashback when using the Nexo Exchange

Nexo Multichain Bridge

This is only the initial phase and Nexo is committed to adding more bridges for new assets and blockchains for their clients' convenience.

Announced on 31 March 2022, the Nexo Bridge enables automatic and immediate transfers with no bridge fees for transfers between ETH & Polygon and introduces a cheaper and faster way to transfer assets to Nexo via the Polygon network.

Nexo Pro

A New Pro Trading Experience For You

Launched in Aug/Sep 2022, Nexo positions Nexo Pro as a trading platform and not an exchange.

Nexo Pro brings sophisticated, professional-grade tools to individual traders. Features include:

• efficient access to aggregated spot and futures liquidity from the 10+ biggest crypto trading venues
• short and long-margin trading
• out-of-the-box strategies such as built in TWAP orders

✔️ Unique Selling Proposition (USP)

Daily payout for FLEX savings

Nexo Earn pays out daily for FLEX savings.

Free crypto withdrawals

Nexo revamped it’s withdrawal policy on 1 August 2023.

• Free Crypto Withdrawals Policy: crypto withdrawals on all supported chains, excluding the Bitcoin and Ethereum networks, are completely FREE for all Loyalty tiers with no limitations.
• For Platinum Users: In addition to the above, Platinum users also get one free withdrawal per month on either the Bitcoin or Ethereum networks.
• The Nexo Multichain Bridge: using this bridge for multichain assets like USDT, USDC, DAI, BUSD, ETH, LINK, MATIC, AAVE, and SUSHI, offers users zero-cost cross-chain exchanges and free withdrawal options for various assets.

Instant swaps

Exchange any of the available market pairs in real-time. Your balances are updated instantly, the moment your order is confirmed.

Insurance of assets

Top-tier insurance of up to $775M (was $375M prior to Jun 2022) on all custodial assets. Insurance provided through Lloyd’s of London and Arch & Marsh via various custodial partners.

Low cost option to transfer stablecoins

The Nexo Multichain Bridge launched in March 2022 helps users reduce transfer fees to a minimum.

At the initial phase, the bridge will support top-ups and withdrawals for USDC, USDT, DAI, and MATIC between the Ethereum and Polygon blockchains.

Here are three use cases for the Nexo Multichain Bridge:

1. Top up your Polygon USDC, USDT & DAI to your Polygon addresses with near-zero gas fees.
2. Withdraw your Polygon or ERC-20 USDC, USDT & DAI to your Polygon addresses with no gas fees.
   • all withdrawals on the Polygon network are free and will not count towards your monthly free withdrawals limits.
3. Withdraw your Polygon USDC, USDT & DAI to your Ethereum addresses much faster.

Platforms that support stablecoin transfers over Polygon include:

• Crypto.com App
• Crypto.com Exchange

Maximum security for assets

“Since launching in 2018, Nexo has lost zero cryptocurrency due to intrusion or hacking and our industry-leading security infrastructure has prevented data leaks and breaches with a 100% success rate.” [Aug 2022]

• Military-grade security. Assets on Nexo are held in cold storage bank-grade Class III vaults via SOC 2 Type 2 certified custodians
  • partners include BitGo, Ledger Vault and Fireblocks.
• Nexo has established a comprehensive institutional agreement with Fidelity Digital Assets. As part of the alliance, assets placed under Nexo’s care will benefit from Fidelity’s insured enterprise-grade custody.
• Nexo has partnered with trusted digital asset platform Bakkt Holdings (NYSE: BKKT). [Jan 2022]
  • Bakkt is supporting Nexo through the Bakkt Warehouse – the company’s regulated custodian – which allows for safe and secure storage of Bitcoin and Ethereum.
  • Nexo users also benefit from $125M of insurance in place at the Bakkt Warehouse.
• ISO/IEC 27001:2013 compliant information security management systems.
• All funds are 100% asset-backed by Nexo’s portfolio of 200-500% overcollateralized crypto credit lines.
  • PCAOB certified auditor and leading US accounting firm Armanino offers a real-time audit of Nexo’s custodial assets, showing assets always exceed liabilities.

Pay exactly what you see

Unlike most exchanges where prices might fluctuate by up to 5%, Nexo fixes the rate the moment you place your order. That means the price you see is the price you pay.

Usage Notes and Tips

Know Your Customer (KYC) process

Nexo’s Advanced Verification is implemented using the Jumio KYC platform and is very convenient. For Singaporeans, you will need to take photos of the front and back of your ID, and follow some simple instructions for facial recognition using your mobile’s camera.

Regulatory compliance policies

If the government in my country decides they want crypto banned, what will you do to protect my crypto holdings?

Information from email received on 1 Dec 2021:

“A country cannot ban crypto. They can ban crypto companies from operating with its residents, they could ban crypto transactions from their banking system, they could ban some of the products crypto companies offer. This does not change the fact that you still own your crypto. In the unlikely event that an outright ban happens, we will do everything in our legal and regulatory powers to assist our clients to continue to operate with their digital assets.”