EDIT: Please upvote so this gets visibility. I’m seeing downvotes already (clearly from Nexo defenders).
I’ve been using the Nexo card for purchases. For those who don’t know, it’s an instant credit-line card – each purchase gives you 0.5-2% cashback and increases the existing credit line by the respective purchase amount, which you can repay any time (I repaid every other day, treated it like a debit card). They accept pretty much any asset as collateral, with various LTV. USDC’s LTV was 90%.
Today I attempted to buy a coffee for ~2 USD, only to discover that Nexo locked 1000+ USDC as collateral, and then noticed that it now says USDC LTV is 0.01%.
There was no announcement, before or after.
Dropping the LTV from 90% to 0.01% and trapping customers’ funds is as much risk mitigation as hunting mosquitos at a baseball game using an RPG and assuming the wounded/dead will think it’s for their own good to avoid mosquito bites.
Who knows what Nexo decides to do tomorrow with your funds. Get it out, or at the very least stop using the Nexo card.
Nexo is basically telling customers to assign zero trust in its products and in the company, and is proving bitcoin maxis right. Congrats.
Nexo is still, however, happy to allow swapping from and to USDC at 90 cents on the dollar in the same app. So it seems that as long as it suits Nexo, USDC isn’t that shit.
I posted in r/Nexo and the post was deleted by mods (post screenshot here).
p.s. I was only using the Nexo card, and only kept some USDC for monthly expenses, was always prepared to lose it. I posted this only as a PSA. I don’t want to read about others losing life savings next week.
submitted by /u/johnfintech