Cryptocurrency lender Vauld has been offered another opportunity by larger competitor Nexo, in a sign of mounting consolidation in the crypto market. Nexo, the leading digital assets institution, announced on Tuesday it had signed an indicative term sheet with Vauld that grants Nexo a 60-day exclusive exploratory period related to its intended acquisition of Vauld, pending a satisfactory outcome of the initiated due diligence process.
Upon successfully completing the transaction, Nexo plans to acquire up to 100% of Vauld and reorganize its future operations to accelerate its deeper presence in Southeast Asia and India.
Vauld’s Financial Crisis
Vauld paused operations and said it was exploring restructuring options due to “financial challenges” posed by a sharp plunge in cryptocurrencies. The Singapore-based company is backed by the likes of Coinbase and Silicon Valley billionaire Peter Thiel. Vauld suspended all withdrawals, trading and deposits on its platform as it looks at restructuring options, CoinDesk reported on Monday. Last month, Vauld said it would lay off 30% of its staff.
The struggling company is not the first to find itself in Nexo’s crosshairs as the market downturn, and knock-on effects of Three Arrows Capital‘s woes hit the industry. In June, Nexo expressed interest in buying some assets from rival Celsius after the lending platform said it was freezing withdrawals and transfers because of extreme market conditions.
It’s the latest firm to get caught up in the chaos gripping the crypto world lately. In the last month alone, Celsius, another crypto lending firm, put an indefinite pause on withdrawals citing “extreme market conditions.” Meanwhile, Three Arrows Capital, a crypto hedge fund, applied for bankruptcy protection days after collapsing into liquidation.
As Tatiana Metodieva, CFA, Nexo’s Head of Corporate Finance & Investments, points out, “We sympathize with all affected by the drastic market downturn. However, difficult times always teach us the importance of business model viability and prudent risk management.” He said, “Nexo welcomes a dialogue with investors in all of the prominent digital asset lending platforms on a new and sustainable way forward through its strategic contribution of bespoke corporate governance, improved revenue generation, and optimized operating cost structure.”
“Operating under the Nexo umbrella puts us instantly in a position of strength to continue the execution of our fiduciary obligations to our customers and simultaneously to execute upon both companies’ ambitious roadmaps, regardless of the market conditions,” Vauld’s Darshan Bathija said.
Nexo is the world’s leading regulated digital assets institution. The company’s mission is to maximize the value and utility of cryptocurrencies while providing the top-tier custodial insurance and military-grade security of the Nexo Wallet. Nexo has processed $80+ billion for 4,000,000+ users across more than 200 jurisdictions.
