Nexo is one of the leading crypto lending platforms that offer investment opportunities in crypto-backed consumer loans. Depending on the crypto you deposit, you can get up to 16% annual interest, paid daily. Nexo is one of the biggest crypto lending platforms operating without oversight. Find out whether Nexo is legit in our Nexo review.
Do you prefer to watch a video? Here's a short review of Nexo:
NEXO is operating in a grey area, without any regulation or oversight. The company acts as a bank without any banking license. There is evidence that suggests that the platform is using shady business practices to generate revenue.
Nexo in Numbers
If you are a loyal follower of our P2P lending reviews, you know by now that we emphasize using every platform’s statistics to get the first impression of its track record.
On Nexo’s website, you can find some of the main data; however, you won’t find anything substantial.
This gave us a good opportunity to reach out to Nexo and test their customer support. Here is what we found out:
While Nexo was founded in 2018, the company behind Nexo, Credissimo, is an established player on the Bulgarian lending market with over 12 years of experience. But more about Credissimo later.
Nexo brags about 200,000 followers on Social Media while not being able to share the total earnings of investors or any other substantial statistics.
This information has been recently removed from their website.
The total loan value since inception is, according to the latest information $10 B. In 2020, this number was only $250 million. According to Nexo, over 2 M of users were using the platform in 2021 - less than half is using Nexo every month. This includes borrowers as well as lenders. In 2020 Nexo claimed to have only half of this user base. Growing more than 500,000 users over the spread of 12 months sounds unrealistic. In 2022, Nexo reports having 5 M users.
The largest P2P marketplace in Europe, Mintos has a user base of around 500,000. The platform has been operating since 2015.
Nexo’s borrowers are mainly cryptocurrency investors, crypto funds, miners, gamers, and virtual reality users.
Nexo’s investors are private individuals, businesses, institutional investors, and crypto exchanges.
According to Nexo, the average portfolio size (in 2020) was $10,987, which is higher than most European P2P lending platforms.
Nexo is also one of the crypto platforms that have its token. As an investor, you can buy Nexo tokens which act as dividend stocks. In 2020, Nexo distributed over $2.4M amongst Nexo token holders. This is just another way to earn extra income apart from your daily interest as a lender. In addition, you can use the token to increase your interest earnings from your crypto deposits.
Nexo Promo Code
Are you looking for a promo code or an additional cashback bonus? Nexo is offering bonuses for new investors at the moment. However, we strongly suggest not to use this platform as the risk and reward ratio on Nexo is incorrect.
While most European P2P lending sites accept only investors within the European economic area, Nexo accepts investors from anywhere, apart from Bulgaria, where Nexo and its management is based.
Further requirements are:
- Be over 18 years old
- Have a valid email address
To top up your Nexo account, you must pass the verification process, which consists of two steps.
During this process, you are requested to fill out contact information and your phone number. Nexo will send you a text message that you must type in on your screen to pass the primary verification. The basic verification allows you to make cryptocurrency withdrawals up to $100,000, which isn’t relevant for you if you’re just an investor.
To top up your Nexo account with one of the supported cryptocurrencies or fiat money, you need to pass the advance verification, where you are asked to provide a copy of your ID document, passport, or driving license.
For some unknown reason, our documents were not approved the first time, so we had to do this step twice.
Once you are verified and activate the 2FA (two-factor authentication), you can top up your account. Currently, Nexo offers top-up options in Euro or Stablecoins backed by the USD. Top-ups with cryptocurrencies are currently only available for borrowers who will use the crypto credit line.
You start earning interest as soon as you top up your Nexo account. The transfer can take up to three business days.
Note that the minimum deposit amount on Nexo is €1,000 in fiat, which is relatively high compared to other crypto lending platforms. Alternatively, you can also deposit stablecoins or cryptocurrencies. We have tested Nexo with a 100USDC, and it worked.
👉 Find the best crypto interest account!
Risk and Return
Crypto lending always comes with a risk, and most investors don’t realize all the possible dangers as they mainly focus on the high yields.
Let’s look at the protection you are offered when investing as an individual investor on Nexo.
Secured by Crypto-Assets
Unlike many other European P2P lending sites that offer investments in unsecured consumer loans, Nexo lists "only loans secured by overcollateralized crypto-assets".
What does that mean?
Let us explain…
Cryptocurrencies have been around for a while. Most users know them as digital assets. The ongoing problem with cryptocurrencies is that they aren’t user-friendly, meaning you can’t use them as fiat money and buy goods with it.
At least not daily.
Nexo allows crypto investors to use their digital assets and offer them as collateral for a crypto credit line.
This means that the borrowers borrow money while offering their crypto as collateral.
Why is this of any good?
Borrowers in certain countries need to fulfill strict credit score criteria. In many cases, the interest offered by banks and non-banking institutions is too high for unsecured personal loans.
Some lenders ask for the interest of more than 100% per annum for short-term loans. Click here to learn more about investing in microloans.
With Nexo, borrowers who own cryptocurrencies can benefit from its digital value while offering it as collateral. There is no need to liquidate the assets if the borrower needs to borrow money.
Banks do not accept this kind of collateral as they lack the technology and innovation, which is where Nexo steps in.
The main benefit for borrowers using Nexo is to borrow money for low interest "without" liquidating their assets.
So what’s the catch?
Borrowers who want to borrow money must provide twice as much value in crypto assets.
Simply put, if a borrower wants to borrow $10,000, he or she needs to transfer crypto worth $20,000 at the time. The LTV, in this case, is 50%.
The credit line can be repaid anytime.
In case the value of the crypto assets drops, the borrower will be asked to pay back a certain amount of the loan or increase the value of crypto assets to match the LTV of 50%.
In case the value of the crypto asset drops by more than 47%, the assets will be immediately sold, and the loan will be repaid.
This is of great advantage for the investor as it guarantees the protection of its investments. The limits are even stricter for Nexo’s competitor Coinloan, where the LTV is maxed at 70%.
Drawbacks for borrowers
If the value of crypto is plummeting within a concise period, it can become very frustrating for the borrower.
Many borrowers reported that the Nexo system sold their crypto-assets without giving them enough time to react and repay the loan or increase the collateral.
As NEXO can amend the terms and conditions anytime, there's undoubtedly room to scam borrowers since the crypto loan platform isn't regulated and doesn't even have a lending license. When borrowing crypto from Nexo, you won't get any legal loan agreement, and Nexo isn't listing the entity you are borrowing from. This means that legally you have no idea where the money is coming from. Nexo hides behind shell companies worldwide lies about being regulated and refuses to address critical questions about their services.
Insured funds up to $375 M
The current lending process, as explained above, is an "excellent" safety net for investors.
Additionally, Nexo partnered with BitGo, a company that specializes in multi-signature encryption technology. Some of BitGo’s investors are Goldman Sachs, Craft Ventures, Galaxy Digital Ventures, and many more. The insurance is provided by Lloyd’s, covering up to $100 M of investors' funds in cold wallets.
Judging by the experience of many fellow investors on Nexo, it's hard to believe that any insurance is of any value to you, as Nexo often fails to display the crypto that you have deposited on your Nexo wallet.
Be aware that insurance doesn't protect you from a potential scam. Nexo is deploying your funds, which means they are not stored in cold wallets and hence not insured.
Not Your Keys, Not Your Coins
As with any crypto lending platform such as CoinLoan or MyConstant, by transferring your crypto to Nexo, you are no longer the owner of your coins as you don’t own the private keys anymore.
Nexo can do whatever they want with your digital assets; there’s no guarantee that you will see them again, as it’s clearly specified in Nexo’s terms and conditions.
Many Nexo users are constantly facing withdrawal issues, increasing the risk of investing in a Ponzi scheme.
Before depositing your digital assets on Nexo, you should consider the risk. If you expect your cryptocurrency to go up over time by 100% within the next 12 months, do you need to risk all of it for a lousy 8% per year?
The risk of lending your crypto to others is much higher as you can’t control the counterparty risk (Nexo being shady).
We suggest taking full responsibility for your money and storing it in a safe hardware wallet where you own the private keys.
We store our digital assets on 🔒 which is the best and most affordable way to keep your crypto safe.
Be savvy & keep your cryptos safe with Trezor.
So what’s the return?
|Supported Fiat Currencies||Supported Cryptos|
|EUR, USD, GBP (yield only on stablecoins)||USDT, HUSD, LTC, TRX, USDC, BTC, BNB, PAXG, PAX, ETH, EOS, TUSD, XRP, LINK, DAI, BCH, XLM|
When investing on crypto lending platforms, you typically deposit money and earn interest on your deposits. Most crypto platforms offer you only to earn interest on digital currencies and not fiat deposits (EUR, USD, GBP). CoinLoan and Nexo were the only two platforms that offer you to earn interest on your fiat deposits. In mid- 2021, Nexo only changed its claims to offering interest on Stablecoins.
The annual yield is highly dependent on the currency you deposit, which ranges between 6% and 10% APY.
If you choose to earn interest in NEXO tokens (their made-up currency), you can get a +2% bonus.
When comparing crypto lending platforms, you might think that Nexo is a better deal due to the higher interest rates. However, be aware that the risk of depositing your money on Nexo is much higher as the platform isn't transparent nor regulated. Keep reading our Nexo review to learn more about this shady platform.
We at P2P Empire like to look behind the marketing statements, which is why we conducted our due diligence about Nexo and its terms and conditions.
Is Nexo Safe?
Investments in crypto-backed loans are a relatively new alternative, so many investors are suspicious of investments they know little.
This is mainly supported by providers' lack of transparency within the crypto lending space.
Let’s have a look at Nexo.
Who leads the team?
Unfortunately, there is no team page on Nexo’s website; however, we could find some information about the owner and co-founder of Nexo during our quick Google search.
Kosta Kantchev is the legal owner and co-founder of Nexo. Nexo also confirmed that he oversees the company's daily operations. Kosta is also the co-founder of Credissimo, the loan provider that helped shape Nexo’s P2P lending platform. Credissimo is also one of the lower-rated loan originators on the popular P2P lending marketplace Mintos.
Antoni Trenchev is the second co-founder and currently the CEO of Nexo. You can watch several interviews with him on Bloomberg, which promotes his bitcoin price predictions. Antoni Trenchev is a former member of the parliament in Bulgaria.
What’s the relationship between Credissimo and Nexo?
Credissimo is a more prominent loan operator in Bulgaria. Since its inception, the Credissimo Group has financed loans worth €200 M. Credissimo’s financial reports are audited by Bulgarian auditor Bakertilly. Nexo is built based on the experiences of Credissimo’s activities and is known as a completely separate legal entity. Nexo doesn't provide any audited reports.
Nexo offers loans backed by crypto-assets to borrowers in 200 jurisdictions except for Estonia and Bulgaria..
We are not aware of any regulators who would allow these types of lending practices. In addition, you are not entering into any loan agreement with Nexo's companies so any "claims" about lending licenses in the US are entirely irrelevant.
Is Nexo regulated?
Nexo's former company Nexo OÜ was claimed to be a licensed and regulated financial institution in the Republic of Estonia by the Ministry of Economic Affairs and Communications.
The truth is that Nexo was only registered as an Estonian company in the field of "administrative and support services". Nexo did not have a lending license in Estonia, nor is it regulated by the Estonian authorities.
Another 🚩 red flag we spotted is that William Arthur Vesilind has joined Nexo's management board. This person was the executive director at TrustBuddy which was a P2P lender known for the theft of clients' money. This person was removed from the board shortly before Nexo decided to wind down its Estonian branch. You can review the entire history of this entity here.
Why is Nexo's website registered under Nexo Capital Inc with an address in the Cayman Islands?
We had difficulty finding Nexo’s address, as none was listed on the website. We dug deeper and discovered that the website is registered in the Cayman Islands. We asked Nexo why this is the case, and here is their reply.
“We conducted our Token Sale from a Cayman Islands SPV. That was done for tax optimization reasons.”
In the terms and conditions, you will find the reference to "Nexo's group of companies". Unfortunately, Nexo doesn't provide any information about its incorporation structure.
We have found out that Nexo is using various shell companies to provide "services" in different jurisdictions. While Nexo brands itself as a London-based company, the core team of Nexo is located in Sofia, Bulgaria, and the branch is operated by NDS EOOD.
Under what jurisdiction does Nexo operate?
"Nexo Services OU operates under the Estonian jurisdiction. The Nexo Group has evolved substantially during the past year, but compliance with the relevant regulatory frameworks remains at the heart of everything that Nexo does." - This was Nexo's response in 2020.
According to Nexo, "the company has very competent and well-seasoned in-house professionals in the legal and compliance departments (three Certified Anti-Money Laundering Specialists from ACAMS) that work with reputable law firms to build their risk models."
In 2021, Nexo's branch in Estonia was in liquidation.
Are there any suspicious terms and conditions?
Nexo’s terms and conditions differ from typical terms of other European P2P lending sites.
The website isn’t liable for any results from using the platform, which means that you agree to lose your money to Nexo.
We couldn’t find any information about amendments or how your funds are stored which is another red flag 🚩.
The only information we’ve found out is that if you deposit Euros to your Nexo account, you’re sending your money to a bank account of the InCore Bank AG in Switzerland. (This was the case in 2021.)
You should expect Nexo to change the terms and conditions anytime without prior notice.
No services in Bulgaria and Estonia
Nexo was registered in Estonia, and the founder has roots in Bulgaria. The platform restricts any usage of its services in those countries.
This red flag only supports the weak legal background of Nexo.
Potential Red Flags
- No public information about Nexo’s management team
- No information about how your funds are stored
- No information about the legal address of Nexo (so you can't legally pursue them)
- Nexo's board member is connected to TrustBuddy (scam)
- No information about the modification of terms and conditions (Nexo changes terms and conditions as it suits them)
- Nexo offers lending services across the world (no regulator would allow this)
- Nexo isn't offering its services in Estonia and Bulgaria (onshore markets)
- Nexo advertised interest on fiat deposits without a banking license which was illegal (currently everything is exchanged into stablecoins)
- Nexo OU (one of Nexo's shell companies) is not regulated in Estonia
- Nexo does not provide any loan agreement for borrowers
- There is evidence that suggests that Nexo is behind ZEUS Capital LLC Fraud (Chainlink Short)
What’s our opinion on Nexo?
During our research, we found a lot of alarming information which put investors' deposits at risk.
Nexo also claims that their reports are audited by Deloitte, even though we couldn’t get our hands on them 🚩.
Nexo offers much higher yields than the competition. In addition, you could earn interest on fiat deposits which no one else (apart from CoinLoan) is suggesting. Nexo does not publicly reveal its business model.
You can be assured that the company is engaged with "crypto-backed loans," possibly yield farming, rehypothecation and other trading activities.
While Nexo refers to several licenses on their website, Nexo didn’t resolve any of our questions. Their terms and conditions lack information about future amendments, how your funds are stored and managed, or even basic information about the legal entity responsible for Nexo's services.
Nexo can refer to any terms and conditions.
Nexo also didn’t provide any links to their “financial license.” After we have conducted our due diligence, we found that Nexo or Credissimo was never licensed to offer loans to consumers in Estonia.
The Estonian Financial Supervision Authority has confirmed this.
Previously the Financial Supervision Authority published a public warning about Nexo's lack of licenses, which has been unfortunately removed on the order of the Estonian highest court of justice.
This suggests that the information on Nexo’s website was misleading (until Nexo decided to remove the advertised license from Estonia from its website).
Nexo also fails to educate its investors about their legal address, which is a clear sign of shady operators that want to avoid any possible legal disputes.
The risk of losing your deposits on Nexo is extraordinarily high, and it's just a matter of time until this business model falls apart.
There is also evidence that Nexo is behind ZEUS Capital, a company created to spread damaging accusations about LINK to drive its price down.
There is also evidence that Nexo had a short position on Chainlink (LINK) which indicates that Nexo is engaged in market manipulation.
Be aware that it is likely that Nexo is controlling its reputation on the Internet with paid reviews and paid collaborations with Crypto influencers.
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Usability of Nexo
Nexo’s platform is made for borrowers and lenders. You can use one account to deposit cryptocurrencies, lend fiat money, or deposit your Euros and earn interest.
You will start earning the promoted yield as soon as you top up your account and deposit fiat or cryptos. The interest on Nexo is paid out daily, which you won't find on many other platforms.
To earn higher interest, you will need to hold a particular percentage worth of your digital assets in NEXO tokens.
Nexo has four loyalty segments, Base, Silver, Gold, and Platinum.
Nexo copied the loyalty system from Celsius Network and lowered the staking threshold to make it more attractive.
Nexo has recently launched their exchange where you can trade supported cryptos, stablecoins, and fiat.
If you think trading on a crypto lending platform is a good idea, we recommend comparing the rates and looking at the spread, which is usually not in your favor.
How Fast Can You Withdraw Your Money?
Nexo promises to offer instant withdrawals for your investments.
This isn't something you should rely on. Nexo reserves the right to delay your withdrawals, and you accept those terms as you deposit your cryptos.
Note that many users may face issues when requesting a withdrawal on Nexo. The withdrawal speed is highly dependent on the transfer volumes on the blockchain.
You don’t see individual loan agreements like Mintos or PeerBerry as your investments are distributed amongst a "basket of loans".
As any financial institution does not regulate Nexo, you have no rights should Nexo avoid paying back your crypto.
We have been in touch with Nexo’s support and exchanged a few emails as a lot of information isn’t published on Nexo’s website.
Unfortunately, after a few emails, the dialogue died, and we haven’t heard from Nexo since then.
If you have some questions, we highly encourage you to get in touch with Nexo via their live chat or send them an email. You can then decide for yourself whether the answer is trustworthy to you.
Nexo Review Summary
Nexo is a crypto lending platform that offers up to 10% interest on your deposits and promises to withdraw your money anytime. The company spent a fair amount of resources building a reputable platform; however, there are some misconceptions regarding their statements about licenses and regulations, which exponentially increase your risk of depositing your money on Nexo.
Key Takeaways from our Nexo Review:
- Not regulated
- Transparency issues
- Misleading information about Nexo’s license in Estonia
- Possible connection to the market manipulation
You should fully understand the ins and outs of your investments. Nexo failed to address all of our questions, which is why we suggest investing in more transparent crypto lending platforms.Compare Platforms
As the crypto lending space is developing rapidly, some information might be outdated. We strongly encourage you to verify any information in this post and do extensive due diligence on any project you plan to invest in.