Nexo Launches $100M Token Buyback Initiative
- The crypto lender will repurchase $100 million worth of NEXO tokens from the open market over the next six months.
- The tokens will be placed in an Investor Protection Reserve with a vesting period of 12 months, and then be used for token mergers and daily payouts.
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Crypto lending platform Nexo has launched a new buyback program for its native token NEXO, this time to the tune of $100 million, the company said in a press release on 15 November.
According to the announcement, Nexo’s Board of Directors has already approved the initiative, which will see the company “discretionally repurchase” the NEXO token from the open market over the next six months. The company further stated that the Board of Directors could launch a consecutive buyback, depending on this program’s performance. Antoni Trenchev, co-founder and Managing Partner at Nexo, said in a statement:
“The buy-back program announced today reflects our strong financial position and underscores our ability to simultaneously upgrade our products, maintain a strong balance sheet, and invest in alternative growth strategies, all while providing significant utility and growth to NEXO Token holders.”
The tokens acquired from this initiative will be used by Nexo for “investments in strategic targets via token mergers”, as well as for daily interest payouts to users who opted to receive their yields in NEXO. The tokens, however, will not be immediately available for use as they will be placed in an Investor Protection Reserve (IPR) with a vesting period of 12 months minimum.
The buyback program is part of Nexo’s ongoing tokenomics initiative, Nexonomics 3.0, which is designed to upgrade the NEXO token’s utility and bolster its value. It is also not the first of its kind, with the company having launched a similar program back in December 2020 worth $12 million. The company also stated that the December buyback program was part of the reason why the NEXO token had reached an all-time high of around $4 in May 2021.
- The probe into Nexo’s activities in Bulgaria was launched several months ago, after international services detected suspicious transactions aimed at circumventing Russian sanctions.
- Reports suggest that Nexo is also being investigated for allegedly committing major financial crimes, and participating in money laundering activities.
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- Unlike other crypto cards that sell user’s holdings at the point of sale, Nexo Card uses a crypto-backed credit line that can use a number of digital assets as collateral.
- Launched in partnership with Mastercard and DiPocket, the card gives access to more than 92 million merchants, and offers a credit line that stays at 0% APR.
- The partnership will provide investors with a tri-party structures that combines Nexo’s unparalleled lending solutions with Fidelity Digital Assets’ asset protection.
- Nexo will extend its asset portfolio, add a second custody level to its security architecture, and provide Fidelity Digital Assets’ users access to its products.