Disturbed digital asset lender Vauld and its committee of creditors (COC) have declined rival Nexo’s final acquisition proposal in concerns about its financial health difficulties.
Nexo loses procurement talks
On Jan. 6, Vauld, a Singapore-based unsettled crypto lender, affirmed the dismissal of procurement talks with rival Nexo due to its inability to respond to appraisal queries for a solvency evaluation that would guarantee creditors.
Vauld’s statement reads:
“We have 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.”
Nexo’s declared withdrawal from the US implies that its creditors in the country have no grounds for complaint if Nexo screws up. Nexo has yet to furnish a financial model demonstrating its capacity to close the $400 million gap in Vauld’s income statement. According to one creditor, it raises concerns that Vauld could be dragged into a second liquidity crunch if Nexo confirms bankruptcy.
Nonetheless, Vauld has until Jan. 20 to create its reconstruction and rehabilitation process. After initially indicating intrigue in the struggling cryptocurrency company in July 2022. It agreed to buy the turmoil exchange in a 60-day settlement agreement after Vauld’s users withdrew $200 million from the service as the failure of vast crypto companies shook investor sentiment. Afterwards, the company stopped withdrawals and applied for a clampdown order in Singapore to shield itself from depositors while restructuring.
Nexo made its newest acquisition offer to Vauld’s lenders on Dec. 26. The managing partner of Nexo stated that Nexo would host an open forum “mid-next week” to discuss the worries of Vauld creditors.
Crypto organizations’ downfall in the bear market
Vast virtual asset organizations got hit by the TerraUSD stablecoin collapse in May 2022, also adding to the bearish market in the ecosystem that assured these corporations filing for bankruptcy on secured finance raising via acquisitions.
For instance, to stay solvent and keep operating, the cryptocurrency mining company Argo Blockchain auctioned its Helios facility in Texas to the virtual currency bank Galaxy Digital Holdings for $65 million.
In December, venture capital firm V Ventures submitted a bid to buy a 90% stake in the struggling Asian exchange Zipmex for $100 million.
The US Securities and Exchange Commission (SEC) has barred Binance.US from purchasing the resources of the insolvent crypto dealer Voyager Digital. Binance US is different from Binance, but it permits its exchange operating systems from its namesake.