Leading cryptocurrency lender Nexo has proposed buying distressed competitor Vauld, which has ceased operations in the face of financial difficulties. The proposal came after the Singapore-based company said it was exploring restructuring options.
Nexo Signs Exclusive Agreement to Consider Buying Vauld
Singapore-based crypto lending and trading platform Vauld, which announced a suspension of customer withdrawals and other transactions, has been offered a way out of its troubles
On Tuesday, leading crypto lender Nexo announced that it had signed an indicative terms and conditions letter with Vauld granting a 60-day exploratory period for exclusive talks on an intended acquisition of a rival company.
On Monday, Vauld’s management said it was suspending operations due to “financial challenges” caused by “volatile market conditions”. They also cited the financial difficulties of their partners and blamed current market conditions for the withdrawal of approximately $198 million from customers in about three weeks.
Against the backdrop of this latest sign of stress in the industry, Nexo noted in a statement that it is up to “competent and well-capitalized organizations to assist the industry.” If the results of the due diligence initiated are favorable, the lender plans to acquire up to 100% of Vauld, restructure the business, and seek “a deeper presence in Asia.”
“Our sympathies go out to everyone affected by the sudden deterioration in market conditions. However, difficult times always teach us the viability of our business models and the importance of careful risk management. It is inevitable that leading companies in the industry will overcome the current crisis,” commented Tatiana Metodieva, Head of Corporate Finance & Investment at Nexo.
Nexo aims to ease the immediate support and withdrawal restrictions implemented on the Vauld platform, which affected more than 800,000 customers,” she affirmed. At the same time, the financial institution plans for the future, including exploring options to offer Vauld customers a wide range of retail and institutional products and improved services.
Vauld’s CEO Darshan Bathija was quoted as saying, “Operating under the Nexo umbrella allows us to continue our fiduciary responsibility to our clients while immediately gaining the strength to execute on both companies’ ambitious roadmaps regardless of market conditions.”
The crypto lending sector has experienced significant growth over the past few years, but has been affected by recent market downturns and negative events such as the collapse of the Terraced (UST) stablecoin in May; in June, US lender Celsius, also citing market conditions, suspended withdrawals and Voyager followed suit a few days earlier. Nexo had also offered to buy Celsius’ assets.
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