Wrapped Bitcoin locked on MakerDAO falls to 2022 low after Nexo drained massive amount of WBTC: Santiment
Blockchain analytics firm Santiment says crypto lender Nexo has withdrawn a large chunk of Wrapped Bitcoin (WBTC) from decentralized finance (DeFi) platform MakerDAO after the company ran into legal troubles with several government regulators.
Santiment says that Nexo’s big pullout from MakerDAO has taken almost half of all WBTC off the platform and that more “big steps” are likely to come.
WBTC is an ERC-20 token that is price-pegged to Bitcoin (BTC) and allows users to engage in DeFi activity with a Bitcoin-based asset on Ethereum (ETH).
“Nexo has made a big move and likely plans to make more after drawing nearly 50% of the WBTC held in MakerDao. This leaves $120 million in WBTC tied up in CDPs (Collateralized Debt Position). We will be watching for any signs of what Nexo is planning to do with their free assets.”
Source: Santiment/Twitter
Last week, state regulators in California, New York, Washington, Kentucky, Vermont, South Carolina, Maryland and Oklahoma made allegations that Nexo violated securities laws with its earn interest product (EIP).
Nexo said it has been working with regulators on the issue and that it has stopped accepting US accounts and balances for EIP since the US Securities and Exchange Commission (SEC) issued a statement on crypto lending platforms’ interest-bearing accounts.
“We have worked with US federal and state regulators and understand their need, in the current market turmoil and bankruptcies of companies offering similar products, to fulfill their mandate to protect investors by examining the past behavior of providers of interest-earning products .”
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