Nexo pours cold water on Vauld Acquisition deal

Sahana Kiran
Source – Nexo

Prominent crypto firm Vauld filed for bankruptcy earlier this year. The Coinbase-backed firm owed $400 million to its creditors. Amidst several discussions and a three-month moratorium extension, Nexo a crypto lending firm came as Vauld’s saving grace. However, at press time the notion would not be carried on to 2023.

Back in July, Nexo affirmed that it was looking to acquire Vauld. Ever since both parties have been in discussions about working out several deals. Nexo had even entered into a 60-day exclusive due diligence agreement with the firm. However, after six months of discussions, there was no room for any deal as per sources.

Earlier today, Vauld’s founder and CEO Darshan Bathija drafted an email to the creditors of the platform. In the email, Vauld’s CEO pointed out that “discussions with Nexo have unfortunately not come to fruition.”

The community as well as Vauld’s users were expecting this deal to come through as the due diligence period was extended twice. However, the discussions were officially terminated. The email further read,

“We have since sought a mutual agreement with Nexo to terminate the existing exclusivity arrangements and we are continuing our active engagement with the shortlisted fund managers in developing a viable strategy that would best serve the creditors’ interests.”

It should be noted that Vauld currently has until January 20, 2023, to resolve its ongoing issue. The firm was granted another extension just last month.

Why did Vauld’s deal with Nexo bite the dust?

One of the main reasons revolved around Nexo’s inclination toward exiting the U.S. This month, Nexo reported that it would “phase out” its U.S. products and services majorly because of the country’s regulators. Since Vauld entails a strong user base in the U.S., its deal with Nexo wouldn’t have worked out.

In addition to this, Vauld alleged that Nexo wasn’t very transparent with regard to its financial conditions. Bathija’s email noted that Nexo did not adhere to Vauld’s multiple requests for a “comprehensive due diligence exercise.” This process would have included a solvency assessment of the crypto firm.

Further explaining Nexo’s revised proposal, Bathija wrote,

“The Revised Nexo Proposal does not allow for a debt tender offer by way of a Reverse Dutch Auction (the ‘RDA’) which would give creditors an early exit option. We had explained to them that based on our engagement with creditors, an early exit option is vital to the success of any proposed restructuring. Unfortunately, the benefits offered under the Revised Nexo Proposal, such as an early credit withdrawal, are set at a threshold which in our view is generally unachievable by the majority of creditors.”

Considering all the above reasons, Vauld has decided to steer away from Nexo.