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Crypto lender Nexo moves ahead with plan to acquire troubled rival Vauld – Bitcoin News
Leading cryptocurrency lender Nexo has offered to buy distressed competitor Vauld, which halted operations in the face of financial difficulties. The proposal comes after the Singapore-based company said it was exploring restructuring options.
Nexo secures an exclusive agreement to explore Vauld’s acquisition
Singapore-based crypto lending and trading platform Vauld, which announced the suspension of withdrawals and other transactions for customers, has been offered a way out of its troubles. On Tuesday, major crypto lender Nexo revealed that it had signed an indicative term sheet with Vauld that gives it a 60-day exploration period for exclusive talks about its proposed acquisition of the rival company.
On Monday, Vauld’s management said it was suspending operations due to “financial challenges” due to “volatile market conditions”. It also cited financial difficulties at its partners and blamed the current market climate for the withdrawal of nearly $198 million by customers in about three weeks.
Amid this latest sign of stress in the industry, Nexo noted in a statement that it is now up to “capable and well-capitalized entities to help the sector.” In the event of a satisfactory outcome of the initiated due diligence process, the lender plans to acquire up to 100% of Vauld, reorganize operations and seek “deeper presence in Asia”.
“We sympathize with everyone affected by the drastic market downturn. But difficult times always teach us the importance of business model viability and sound risk management. It is inevitable that industry leaders will navigate their way out of the current crisis,” commented Tatiana Metodieva, Nexo’s Head of Corporate Finance and Investments.
Nexo assured that it “aims to provide immediate assistance and alleviate withdrawal restrictions in place on Vauld’s platform,” which affected more than 800,000 customers. At the same time, the lender is planning for the future, including by exploring options to provide Vauld’s customers with a wider range of retail and institutional products and improved services.
Vauld’s CEO Darshan Bathija was quoted as saying that “Operating under the Nexo umbrella immediately puts us in a position of strength to continue the performance of our fiduciary obligations to our customers while following both companies’ ambitious roadmaps, regardless of market conditions.”
The crypto lending sector has seen significant growth over the past couple of years, but was impacted by the recent market downturn and negative events such as the collapse of the terrausd (UST) stablecoin in May. In June, US lender Celsius suspended withdrawals, again citing market conditions, followed by Voyager, which did the same a few days ago. Nexo had also offered to buy the assets of Celsius.
Do you expect to see more consolidation in the crypto industry and the lending sector in particular? Tell us in the comments section below.
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