Crypto Lender Nexo's Potential Acquisition of Rival Vauld Is Called Off

Crypto lender Nexo’s potential acquisition of rival Vauld was canceled some five months after the two signed an initial agreement to explore the transaction and less than a month before the Singapore-based target has to come up with a restructuring plan.

“We were previously exploring a potential acquisition by Nexo as part of the proposed restructuring plan,” Vauld said in a private message on Twitter. “To provide a very brief summary, our discussions with Nexo have unfortunately not come to fruition.”

Vauld suspended all withdrawals, trading and deposits on its platform as it looked at restructuring options, CoinDesk reported in July. The company filed for creditor protection in Singapore earlier the same month and has until Jan. 20 to work on a restructuring plan. In June, firm said it would lay off 30% of its staff.

According to an affidavit on July 8, the company owed $402 million to its creditors, with 90% of that debt originating from individual retail investor deposits. A month after it filed for creditor protection, Indian authorities froze assets worth 3.7 billion rupees ($46.4 million).

In explaining the end of the transaction, Vauld said Nexo hadn't responded to due diligence requests for a solvency assessment that would provide its creditors with assurance. It also pointed to Nexo's Dec. 5 announcement it was phasing out service in U.S., possibly leaving Vauld's customers in the country without a way of having their claims handled. A third point was the proposal failed to offer Vauld creditors an early exit option, which it said was vital to a successful restructuring.

Nexo had not responded to a request for comment by the time of publication.