Nexo Begins the process of Acquiring the troubled Vauld crypto lender
London-based crypto company Nexo has signed a framework agreement with rival crypto lender Vauld. Nexo will begin a comprehensive review and plans to acquire up to 100% of the troubled firm. The withdrawal of funds by clients will remain frozen for the time being.
Cryptocurrency lender Nexo has begun the process of possibly acquiring competitor Vauld after the latter suddenly suspended withdrawals by customers on Monday.
On Tuesday, Nexo said it had signed an indicative agreement with Vauld on a plan to acquire up to 100% of the Singapore company. The agreement grants Nexo, based in London, a 60-day exclusive research period during which it will conduct a comprehensive review.
"We need to see exactly what is indicated in their books, and it will take some time," said Nexo co-founder Anthony Trenchev. But since we have an exclusive research period, right now we are the only ones considering acquiring them."
Vauld is experiencing financial difficulties, as it became known on Monday. The cryptocurrency trading and credit platform has suspended withdrawals, trading and deposits and hired legal and financial consultants for possible restructuring options.
Withdrawal of funds by clients will remain suspended for the time being.
Trenchev said Nexo could restructure or refinance Vauld depending on the results of the due diligence. That is, if Vauld has some assets put on for longer periods, or he has invested for a long time, Nexo can take them and provide liquidity instantly. On the other hand, if their assets are lost, Nexo can potentially make up for them, if that makes sense, Trenchev said.
"We have to consider this in a general context: if we intervene, will we be able to restructure the business so that it functions again, so that it is profitable under the Nexo umbrella, which is profitable as a company, and will we be able to accumulate this," Trenchev said.
As for why Nexo is interested in Vauld, Trenchev said that Vauld has "huge support in India and Southeast Asia, which are important markets for us."
Founded in 2018Darshan Batija andSanju Kurian, Vauld is a cryptocurrency exchange and lending platform, most of whose team is based in India. According to Batidge, at the peak of its development, Vauld had assets worth about $1 billion under management.
He declined to comment on how big the hole in Vauld's balance sheet is, but a person familiar with the situation said that the company owes creditors "millions in the middle and high double digits," which can be interpreted as an amount of $ 50 to $100 million.
Vauld is not the only struggling firm that Nexo has turned to. Last month, Nexo offered to buy the assets of its bankrupt competitor Celsius. The offer was opened within a week and expired because Celsius was not interested in making a deal.
But Vauld seems to be showing interest in the deal.
"Working under the auspices of Nexo immediately gives us the opportunity to continue fulfilling our fiduciary obligations to our customers and at the same time fulfill the ambitious plans of both companies, regardless of market conditions," Batija said.
https://coin-signal.com/cryptonews/nexo-begins-the-process-of-acquiring-the-troubled-vauld-crypto-lender/
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