Nexo, a Switzerland-based cryptocurrency lending firm, has terminated its potential plan to acquire Singapore-based crypto lending platform Vauld. Darshan Bathija, the Vauld founder and CEO, sent out an email today to the company’s creditors, stating that the firm’s deal with Nexo has unfortunately failed to materialize.
Since July this year, Nexo and Vauld had been engaging in talks to strike out the deal when Vauld halted suspended customer withdrawals and business operations after experiencing a terrible liquidity crisis. During that time, Nexo launched a two-month due diligence discussion with Vauld to potentially acquire the troubled crypto lending firm. Nexo then extended discussion periods two times, but now the two companies have formally terminated the talks.
Sources have identified reasons behind the collapse of the deal. The key reasons why the deal, unfortunately, failed to go through involved the Indian authorities seizing funds worth $46 million belonging to Vauld, Vauld losing a huge amount of money in the collapsed TerraUSD stablecoin, Vauld’s funds being frozen from the bankrupt FTX exchange, and Vauld’s unserviced huge loans worth $130 million from Amber Group.
Besides that Vauld has the majority of clients based in the US, but Nexo recently announced plans to terminate its offerings to US customers. So Nexo has found the deal not making sense to its business needs.
Before Nexo terminated the discussions, on two different occasions it presented the potential deal terms to Vauld. However, Vauld and its creditors were not impressed with the terms. In today’s email, Vauld CEO Bathija said Nexo’s revised terms would not be in the best interests of the company’s creditors. Bathija also stated that Nexo did not provide transparent information about its financial condition.
Since the potential deal has collapsed, Vauld’s new restructuring plan now seeks to hire a fund manager to be responsible for managing clients’ funds.
On July 4, Vauld suspended customer withdrawals and business operations after it became one of the casualties of the collapsed TerraUSD stablecoin.
Nexo planned to acquire Vauld and signed a term sheet for purchasing a 100% stake in the fellow crypto lending company. Nexo wanted to utilize the acquisition to accelerate its footprint in Asia.
On November 11, Vauld obtained an extension on its creditor protection program until January 20 in order to address its financial challenges and stated that it has been working on a restructuring plan to revive its business.