Vauld Rejects Nexo’s Another Acquisition Proposal: Nexo Solvency Proof required

Nexo has been trying to acquire Vauld since January 2023.
Nexo has announced that it is quitting the US market; how will the US customers be treated?
US creditors want proof that Nexo is solvent.

Relatively new crypto lender Vauld is wading through troubled waters as its Committee of Creditors (COC) rejected the final acquisition proposal by their rival Nexo. Due to concerns over Nexo’s financial health and other issues.

Vauld co-founder and CEO Darshan Bathija wrote in a letter to Nexo dated Wednesday, saying,

“We have taken the terms of the Final Nexo Proposal into consideration and further consulted with COC, and we unanimously do not accept your proposal as it stands.”

Although Vauld rejected Nexo’s offer, citing no significant changes over the previous proposal, they are now asking questions about their plans on treating the claims of US-based Vauld creditors as they have just announced their plans for exiting the market. Another important question is are in good financial health to carry out the deal.

Bathija wrote in the letter saying what Nexo’s plan on giving assurance to US clients in the event Vauld files for insolvency is, and they have already failed to provide an adequate response to repeated requests for a comprehensive due diligence exercise, including the insolvency of Nexo.

A Vauld creditor, on anonymity condition, told media that they “want ironclad assurance that Nexo is solvent, so we don’t get swept up into another insolvency crisis.”

Citing the plethora of uncertainty for Vauld’s US creditors, making 45% AUM, would get no protection in case Nexo goes bust; moreover, they still haven’t given any financial model to have an arguable estimate of hole reduction.

Nexo is given time until Friday to respond, as Bathija said in a letter saying:

“As these requests are not new to you, we hope that you will be able to show your sincerity in this proposal by providing us satisfactory responses to our queries before the close of business in Singapore on Friday, 6:00 pm (SGT) on January 6, 2023.”

Nexo will be hosting a live AMA session mid-next week to address all the outstanding questions regarding the proposal. Vauld is adamant that this is the offer that creates maximum value for the customers. Kalin Metodiev, managing partner and co-founder at Nexo, told the media that contrary to the belief in the space, Nexo has third-party confirmations that the assets exceed the liabilities concerning real-time attestations since mid-2021.

Vauld now owes more than $400 million to its creditors, and both parties have been in talks about the deal since early July 2022. The firm has until January 20, 2023, to sort out all the financial issues, as they received a credit protection extension last November.

Vauld is waiting for another extension, of which the hearing is scheduled on January 17, 2023.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing