Cryptocurrency lender Nexo signs term sheet to acquire distressed rival Vauld

BLOCKCHAIN

Cryptocurrency lending provider Nexo has signed a term sheet to acquire rival lending firm Vauld, two days after Vauld suspended services amid financial challenges.

The indicative or nonbinding term sheet grants Nexo a 60-day exclusive exploratory period related to the intended acquisition of Vauld, pending a satisfactory outcome of the initiated due diligence process. Upon completion of the transaction, Nexo plans to acquire up to 100% of Vauld and reorganize its future operations to accelerate its deeper presence in Asia.

Nexo said it finds synergies with Vauld’s existing focus on Southeast Asia. The company said that although it aims to provide immediate assistance and alleviate withdrawal limitations on Vauld’s platform, it has bigger plans going forward. Nexo plans to explore the integration of a wider retail and institutional product range, strong liquidity, legal and regulatory expertise, automation, risk management and best business practices.

“The aim is not only to protect Vauld’s existing customer base to the fullest extent possible but also to give them access to an improved range of services,” Nexo said today in a statement.

Vauld announced Monday that it had suspended all withdrawals, trading and deposits, saying that its financial issues resulted from volatile market conditions and financial difficulties with key business partners. Vauld also cited the current market climate leading to significant customer withdrawals of $197.7 million since June 12.

June 12 is a significant date, since it’s the day the collapse of the Terra stablecoin triggered the cryptocurrency market swoon. Since then, Celsius Network LLC has paused withdrawals and Three Arrows Capital Ltd. defaulted on its loans.

Vauld welcomed the proposed acquisition. “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 at the same time to execute upon both companies’ ambitious roadmaps, regardless of the market conditions,” said Darshan Bathija, co-founder and chief executive officer of Vauld.

The terms of the deal were not disclosed. Coming into the acquisition, Vauld has raised $27 million in venture capital funding from investors that include New Form Capital, Pantera Capital, Robot Ventures, Coinbase Ventures and Valar Ventures.

Image: Nexo