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Nexo Taking Steps to Acquire Distressed Crypto Lender Vauld

Vauld announced Monday that it had paused customer withdrawals amid volatile market conditions. Now, it looks like Nexo could be stepping in to acquire the firm.

Nexo Taking Steps to Acquire Distressed Crypto Lender Vauld
Shutterstock cover by Lidiia (edited by Mariia Kozyr)

Key Takeaways

  • Nexo has signed an indicative term sheet with Vauld, granting it an exclusive 60-day exploratory period to look into acquiring the firm.
  • Vauld halted customer withdrawals Monday, saying it was "facing challenges" due to extreme market conditions.
  • Several other crypto firms have faced similar issues in recent weeks in the fallout from Terra's collapse, the Three Arrows Capital crisis, and a broader market decline.

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Vauld is one of several crypto lending firms facing insolvency issues due to the crypto market downturn. 

Nexo Looks to Acquire Vauld 

Nexo is making plans to acquire Vauld. 

In a Tuesday press release shared with Crypto Briefing, Nexo revealed that it had signed an indicative term sheet with Vauld, granting it an exclusive 60-day period to explore a potential acquisition. Nexo is looking to acquire up to 100% of the firm in a bid to expand its presence in Asia, the press release said. 

On Monday, Vauld announced that it had paused customer withdrawals as it admitted it was “facing challenges” amid market volatility. A blog post revealed that customers had withdrawn $197.7 million since Jun. 12, resulting in a liquidity crisis. 

The crypto lender is the latest of several firms to come into serious trouble in the fallout from Terra’s collapse, Three Arrows Capital’s bankruptcy, and a general decline in crypto asset prices, following the likes of Celsius, Voyager Digital, BlockFi, Babel Finance, CoinFLEX, and CoinLoan. As the market has dropped, crypto lenders have been particularly hard hit as customers rush to withdraw funds in fears of falling victim to insolvency issues. BlockFi announced Friday that it had inked a deal with FTX.US to be acquired for up to $240 million with FTX.US offering an additional $400 million rolling credit facility, while Nexo last month reached out to Celsius for a potential asset buyout after it froze withdrawals (neither firm has yet shared an update on the offer). 

Nexo’s press release likened the recent events to the Bank Panic of 1907, citing “excessive leverage in the system” as a primary factor for the market-wide crisis. The firm said that it was “in a position to help distressed industry participants” and revealed that it had hired two top Wall Street institutions to advise on potential acquisitions. “Our most important task is verifying whether a Nexo-led overhaul can see the firm thrive again and whether it can be profitable within our business model and company culture,” Nexo co-founder and managing partner Antoni Trenchev told Crypto Briefing.

In the press release, Nexo outlined plans to provide emergency assistance for Vauld to continue honoring customer withdrawals and added that the troubled firm’s presence in the Southeast Asian market aligned with its own goals. It also said that it would look into integrating more retail and institutional products, provide liquidity, offer legal and regulatory expertise, and assist with risk management practices. 

Though the acquisition will only be confirmed if Vauld meets the satisfactory requirements of Nexo’s due diligence checks, Vauld CEO and co-founder commented that he was pleased that his firm had found a potential path forward. “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,” he said. 

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies. 

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