Crypto lender Vauld said the potential acquisition by rival Nexo has been canceled five months after the two signed an initial agreement to explore the transaction and less than a month before Singapore-based Vauld has to come up with a restructuring plan.
Talks, however, are still taking place, according to a person familiar with the negotiations. For the deal to be canceled, there needs to be mutual agreement, and that's not the case now, the person said.
“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.”
Nexo, however, said it's not calling off the deal quite yet.
“Nexo has not given up on its attempt to save Vauld and help its creditors recover the maximum possible platform funds," Nexo co-founder and managing partner Kalin Metodiev said in an email.
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, the 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 to assess Nexo's solvency that would provide its creditors with assurance. It also pointed to Nexo's Dec. 5 announcement it was phasing out service in the 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.
UPDATE (Dec. 26, 14:42 UTC): Adds response from Nexo in fourth paragraph; rewrites headline, first paragraph to reflect comment.
UPDATE (Dec. 26, 16:03 UTC): Adds comment from person familiar with the talks in second paragraph.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.