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Shortly after Vauld announced withdrawals suspension, Nexo revealed it signed an indicative term sheet. The company also mentioned the plan to acquire Vauld.
London-based crypto lender Nexo has started the process to potentially acquire Vauld, a rival in the crypto lending space. Nexo told The Block about the 100% acquisition plans on July 5th, less than 24 hours after Vauld abruptly suspended withdrawals from its platform. Singapore-based crypto lender Vauld Group announced that it is halting withdrawals due to financial challenges. Nexo co-founder, Antoni Trenchev, stated that the company has an interest in India and the Southeast, where Vauld has “huge traction.”
Like other crypto companies, Vauld complained that the decision was to keep the company afloat during these troubling times. The crypto lender also said it began to record excessive withdrawals from its platform, which could negatively impact the company. Announcing the withdrawal halt, the Vauld management referred to the volatile market condition, financial difficulties, and the current market climate. The crypto lender added that customers withdrew $197.7 million since June 12th, when the entire crypto market started struggling with the USDT collapse. It further said the decision by the Celsius network to pause withdrawals and Three Arrows Capital defaulting on loans triggered excessive withdrawals on its platform.
The news destabilized Vauld customers, especially those with assets locked up on the platform. It is unclear what the crypto lending complaints plan to do next. However, it is considering reconstruction options. It added:
“Specific arrangements will be made for customer deposits as may be necessary certain customers to meet margin calls in connection with collateralised loans.”
Nexo to Potentially Acquire Vauld
Shortly after Vauld announced withdrawals suspension, Nexo revealed it signed an indicative term sheet. The company also mentioned the plan to acquire Vauld. Per the term sheet, Nexo has a 60-day exclusive exploratory period to conduct due diligence. Trenchev said:
“We have to see what exactly is on their books and it’s going to take a little while. But since we have the exclusive explanatory period, we are the only ones looking at them right now.”
Complimenting the reconstruction option Valud mentioned at the point of halting withdrawals, Trenchev said Next could reconstruct the crypto lending firm upon acquisition. The co-founder added that Nexo could also refinance Vauld, depending on the result of the 60-day exploratory period. Nexo could take assets on Vauld staked for longer periods and provide liquidity in return. The acquiring company could also potentially replenish assets that are lost.
“We have to view it in an overall context of if we step in, can we restructure the business so that it is functioning again, so that it is profitable within the Nexo umbrella, which as a company is profitable and whether we can accumulate that,” added he.
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