Crypto lending firm Vauld has rejected a long-running acquisition offer from its biggest competitor, Nexo, according to various reports on Jan. 5.
In a private letter, Vauld co-founder and CEO Darshan Bathija told Nexo that his company would reject a final proposal submitted by Nexo.
Vauld said Nexo did not provide a credit rating. He also expressed concerns about how Nexo would treat US-based Vauld customers, as Nexo said in December it would stop serving residents of the country. Vauld concluded that Nexo’s revised proposals failed to secure either issue.
Bathija wrote in the rejection letter:
“We have considered the terms of Nexo’s final proposal and consulted with the (creditors’ committee), and we do not unanimously accept your proposal as is.”
Nexo’s acquisition offer has been under consideration since last July. Vauld was one of several companies that filed for bankruptcy last summer following the collapse of Celsius – an event that led it to turn to Nexo for help.
However, the planned deal ran into hurdles in the months that followed, and Nexo revised its proposal several times. Just hours before Vauld’s final rejection was announced on January 5, Nexo published an open letter containing a final offer for Vauld.
Nexo called this proposal “the best way possible” and “the only way forward”. The final offer would have seen Nexo acquire Vauld’s customer base, crypto assets, customer crypto assets, cash, and various other assets and liabilities.
The deal would have onboarded Vauld’s customers as “new Nexo customers.” He also allegedly transferred balances due to accounts called “new Nexo accounts”.
Nexo also said in yesterday’s letter that it planned to enforce a break clause that would force Vauld to pay $20 million. Although the two companies initially signed a 60-day exclusivity agreement, this agreement was later extended Another 30 days until October 2022. It’s unclear if the companies have extended the deal further, or if Nexo believes Vauld broke the deal earlier.
Last month, reports were conflicting over whether Nexo and Vauld would go ahead with the planned deal. While Vauld said negotiations had failed, Nexo suggested he was still willing to pursue a deal and submitted a revised proposal.
This week’s developments have ended the dispute, and it looks like Vauld will be working with a fund manager maligned by Nexo instead. Vauld allegedly owed over $400 million to his clients based on crypto prices during his collapse.