Nexo pulled out of negotiations to acquire Vauld
After six months of discussions, a deal for crypto lending platform Nexo to take over rival Vauld has broken down. This was reported by The Block.
Vauld CEO Darshan Bathija said that "negotiations were unfortunately unsuccessful."
The parties had been discussing a takeover since July, when Vauld suspended operations and announced a possible business restructuring.
Nexo extended the timeline for a final decision twice after reaching a tentative agreement.
"We sought a mutual agreement with Nexo to terminate existing exclusivity arrangements, and we are continuing our engagement with the shortlisted fund managers in developing a viable strategy that would best serve the interests of the lenders," Batija explained.
The publication's sources said there were a number of reasons why the potential deal did not go through. Among them, they cited:
Vauld's losses from the collapse of the Terra ecosystem;
Seizure of assets by Indian authorities;
blocked funds on the bankrupt FTX;
the amount owed on Amber Group loans.
Another argument was the significant share of U.S. clients on the platform. In early December Nexo announced its departure from the U.S. market.
Vauld clarified that it had not reached an agreement with the buyer on the process of reimbursement to creditors. The company also said that Nexo had not been transparent enough about its financial situation.
"Nexo did not respond to requests for due diligence, including a solvency assessment, or other arrangements that could have been agreed to provide creditors with a higher level of certainty," the publication quoted the platform as saying.
Vauld is considering a new restructuring plan after a potential deal with Nexo was derailed. It consists of bringing a third-party fund manager into the process. The company has made a "short list" of two candidates out of an initial six.
"We are in the process of developing proposed strategies and authorities, consulting with lenders to negotiate terms with the final shortlisted fund manager candidate in the new year," the statement said.
Vauld acknowledged a $98 million "hole" in its balance sheet, mainly attributing it to an $8.8 million loss in FTX and the depreciation of tokens owned by the platform.
In November, Vauld secured an extension of protection from creditors until Jan. 20, 2023. According to The Block, the firm filed a motion to further postpone