Nexo set to counter allegations of “illegal” XRP liquidation
Crypto lending platform Nexo has taken action against what it calls false and unwarranted claims against them after suspending XRP.
The consequences of XRP hit Nexo
The US-based crypto firm said in a April 5 Blog that the unfounded lawsuit against her amounted to damage to her reputation. Nexo is now committed to treating accusations with “the same gravity” via the applicable legal instruments and mechanisms.
Nexo was falsely criticized last week when California resident Junhan Jeong filed a class action lawsuit against the XRP suspension in December of last year.
The principal applicant submits that Nexo acted dishonest temporarily suspending repayments of XRP lines of credit and stopping the withdrawal of new XRP-backed credits. The move caused monetary losses of an alleged amount of $ 5 million to exchange clients during loan liquidations, according to the lawsuit.
Nexo was among around 30 major crypto firms that stopped trading XRP after the SEC filed a lawsuit against Ripple Labs and its founders, claiming the token is security.
The crypto lending platform has now claimed that the action it has taken was due to regulatory uncertainty over the nature of XRP and was aimed at protecting the interests of its clients.
Nexo’s XRP debacle
Just a day after the SEC filed a lawsuit against Ripple Labs on December 22 of last year, Nexo suspended XRP.
The move meant that customers who had taken out a fiat loan from the platform using their XRP holdings could no longer service their XRP Backed Loans. The suspension also meant that clients could not use XRP as additional collateral to maintain their loans.
In their latest blog, Nexo explains that it has followed all applicable laws and regulations when handling the XRP saga. While the SEC action caused a severe collapse in XRP prices and led to the liquidation of several clients, Nexo insists it did nothing wrong.
The crypto lender has outlined its terms and conditions which govern Nexo’s contractual relationship with all users of its cryptocurrency credit facilities.
In accordance with the rules governing Nexo’s credit facilities, customers could have used any crypto-asset besides XRP to repay their crypto credits or provide additional collateral to prevent liquidation.
Nexo seeks full compensation for reputational damage
Nexo describes any adverse action against it regarding its handling of XRP as a complete lack of understanding of the contractual arrangements between the platform and its customers.
Nexo’s blog post explains that the decision to take legal action comes after several unsuccessful attempts to settle the dispute with its accusers out of court.
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