This information comes directly from Nexo's help center
Our Nexo Crypto Credit General Terms and Conditions state the following in the point IV.4:
Unless prohibited by any Applicable Law, by virtue of this Agreement Nexo acquires the ownership of the Collateral while the Nexo Crypto Credit is outstanding.
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Does Nexo in fact take ownership of collateral for the credit line facility.
Their terms and conditions would indicate they do in fact take ownership, which is quite different to other platforms such as Biance where ownership does not actually transfer, they “lock’ the collateral so you can’t sell it. By Nexo acquiring all rights and title to the collateral, it is effectively a sale and would trigger a taxable event. I have found it impossible to get a copy of their article IX.3.1.3 which they refer to and their support people are not at the correct level to be in a position to reply to this query. I do wonder if this has anything to do with the fact they say they do not have to report under the common reporting standards but are looking into this further. Anu concrete evidence saying ownership does not transfer would be greatly appreciated.