The Anatomy of Fake News: The Latest Attack on Nexo
While Nexo generally does not engage in refuting obvious lies and smear campaigns, in the current environment of volatility and extreme conditions, we have listened to the blockchain community and their desire for us to briefly address a slate of ludicrous allegations for the sake of transparency and clarity.
- Several anonymous Twitter accounts are using lies and distortion in yet another smear campaign against Nexo and profiting from short positions in a distressed market.
The entire thread of the anonymous group of short-sellers is based on shallow lies and far-fetched connections from 2020.
The typical formula of which all fake news consists:
1. State something so unfathomable that instantly creates an emotional response, thus manipulating the reader into abandoning logical scrutiny of the click-bait statement so you instantly gain a huge following that you can sell for profit:
2. The purpose is to monetize on followers: The self-proclaimed “crypto patriot” is looking to sell his profile for the right price, in an instant, as reported to Nexo by a person who attempted to buy the account:
- Neglect motive and abandon reasoning - “why would a company with hundreds of millions in revenues and billions of assets under management, vetted by Fidelity, Mastercard and dozens of regulators ever have to resort to petty theft, let alone from children with medical needs?” is the logical yet neglected question.
- Make it entertaining. Create intrigue by decorating your claims with irrelevant but interesting details. This upkeeps the likelihood of an emotional response while ensuring social buzz and even more followers:
- Refer to authority, best equipped is a website that may sound like a government institution, whereas it is a private media site:
- Drop the big lie amidst the sensationalism. Nevermind, that the person in the photo is NOT Kosta Kantchev (co-founder of Nexo), but Constantine Krastev. A combination of the names into “Konsta Kanchev” is made to mimic a typo as an excuse to fact-checkers:
In reality - they are two different people:
- Ensure administrative control to block all contradictory comments and maintain full authority over the narrative:
- Reiterate nefariousness using exclamation and imagery to reestablish emotional response once the big lie has been dropped:
- Pretend to have a noble motive and support of the community:
While in obvious contradiction to previous tweets:
The purpose of click-bait fake news is most often financial gain. Whereas with tabloids it is to increase viewership and income from advertising, in the currently distressed market, we can only find a reason for this smear campaign against Nexo in the form of instilling chaos, in order for a small group of anonymous short-sellers to profit financially and then sell the account for maximum profit.
The truth, as usual, is simple: Nexo and the Bulgarian non-profit charity, accused of wrongdoing, have not and never had any common operations, common beneficial owners, or common management.
- The list of examples of the anonymous group’s inconsistencies, blatant lies, and the manipulation of facts goes on and on. The aim is to cause further distress in the markets by shifting the focus from the fundamentals that underpin the fortitude of Nexo:
- Thanks to its sound overcollateralization and risk management, Nexo is the only crypto lender that has needed no bail-out, no loans, no halting of withdrawal, or imposing new daily limits.
- Nexo has 40+ licenses and registrations throughout the world — Nexo is regularly granted licenses from financial regulators across the globe after extensive due diligence processes which include enhanced background checks in the form of fingerprinting, checks of criminal records, and reputational and character references, and much more.
- Nexo includes the likes of Armanino, Fidelity Digital Assets, and Mastercard among its trusted partners. In order for any sort of association with household names like this, Nexo and the people managing it have passed all checks on a corporate and personal level.
- Nexo takes its fiduciary obligations toward all of its clients with the utmost seriousness and to protect them and their assets, Nexo will use any legally available means. Legal claims are being brought by Nexo’s US and UK legal counsel against all defamatory statements and false allegations presented and shared by a group of coordinated anonymous Twitter accounts. Our message is clear - everyone engaging in detrimental activity to Nexo will be held accountable.
- Nexo strongly condemns any expression of prejudice, xenophobia, and discrimination on the basis of one’s national, ethnic, or racial identity. We are proud of Nexo’s co-founders’ heritage as they have shown nothing but an impeccable track record of a relentless pursuit of excellence.
- Nexo has experienced such attacks before. Two years ago the company saw a coordinated attack, using the same tactics as the present one - fabrication of lies, distortion of facts, and a massive social media campaign by anonymous trolls to link Nexo to the now infamous Zeus Capital report. An elaborate conspiracy theory was created to smear Nexo and an intensive online harassing campaign against a researcher of ours, leaving the employee seriously traumatized.
Nexo, however, emerged stronger out of it and grew twenty-fold in size, assets, and reach. We have done so before, we will do so again.
In the midst of all the noise, sometimes it is hard to distinguish what is worthy of your attention and what tries to profit financially from it. To help you distinguish fake news and stay well informed, we advise you to read through a few pages of this very useful document, so as to never fall victim to fake news.
It is easy to click retweet on a well-engineered click-bait. But it is moments like the present one - market turmoil, a paradigm shift from loose monetary policy to tightening, opportunistic legislators - that the crypto industry has to come together and be collectively better. Building is always harder than reckless destruction, but it is what we build and the type of responsible behavior that we all exhibit during the testing times that will lay the foundation of the next cycle of growth for the blockchain space.