Vauld, a crypto lending firm, is facing a tough time due to unfavourable market conditions, which has prompted Nexo, its competitor, to explore a buyout.
Nexo stated that they had signed a term sheet with Vauld. With this, they have given the firm 60 days of exclusive talks for exploring an all-equity acquisition of the company. If this goes successful, Nexo will restructure the company and pursue expansion in Southeast Asia and India.
But when did Vauld get into such trouble? Yesterday, Vauld stated that they had paused operations. Moreover, they also stated that they are looking at restructuring options due to “financial challenges”. This mounted due to the sharp drop in crypto prices across the market.
Vauld is not the first crypto firm to have done so. Last month, crypto lending firm Celsius put an indefinite pause on withdrawals. The firm did so due to “extreme market conditions”. On the other hand, Three Arrows Capital (3AC), a crypto hedge fund, applied for bankruptcy protection. This happened after the firm collapsed into liquidation.
Co-founder of Nexo, Antoni Trenchev said that it is a bit ‘early’ to talk about his firm’s valuation at this stage. However, he is “optimistic” about reaching a deal.
The Nexo chief told CNBC:
“We are starting the due diligence. We have a 60-day window of exclusivity where they will open up the books. You will see everything. Is there a hole? How big is the hole? Where are the assets? Who are the counterparties?”