Do I get alerted before any of my assets are moved from savings to credit line? What about liquidation?

In case of a decrease of your collateral asset value, a warning would be sent to the client that they should deposit more crypto assets to their Nexo Wallet to prevent liquidation. Please note Nexo will not liquidate all crypto assets at once – liquidations are made in small increments only as much as to rebalance the Loan-to-Value back within the limits.

You will receive a total of 3 notifications before any automatic repayments occur and each notification is sent both by email and by SMS to the email and mobile phone number associated with your Nexo account. Unlike margin brokers, Nexo do not have any interest to see your asset being automatically sold to repay the loan, in fact – quite the opposite, Nexo make money only when you have an active loan with them.

You are not required to post any margin after receiving these notifications, they are more like reminders that if your assets drop further, partial or full automatic repayment can occur.

As you know, unlike traditional financial markets, the crypto market never closes, thus Nexo cannot postpone automatic partial repayments as the outstanding balance will be less than the collateral and the borrower will have zero motivation to repay the difference.

August 21, 2022
Was this article helpful?

Leave a Reply

Your email address will not be published. Required fields are marked *