Cryptocurrency lender Nexo changed his mind about buying his direct competitor

Cryptocurrency lender Nexo, which was in talks to buy out rival lending platform Vauld, said it was unable to complete the deal. According to an email from Vauld founder and CEO Darshan Bathija to creditors, a potential Nexo deal fell through after six months of negotiations.. They began in early July when Vauld suspended client funds withdrawals after facing a major liquidity crunch.. At that time, Nexo entered into an exclusive 60-day due diligence agreement with Vauld. This agreement was later extended twice.. Both sides have now formally concluded negotiations. There are several reasons why a potential deal did not materialize.. Among them: the loss of a significant amount of Vauld funds in the collapsed Terra ecosystem, the confiscation of assets by the Indian authorities, the presence of assets stuck on the bankrupt FTX exchange, plus a large loan receivable from Amber Group. In addition, Vauld has many clients in the US, and in early December, Nexo management announced its intention to leave the US market due to complaints from regulators.. As a result, the deal does not make sense for Nexo, the letter says. Batigi also notes that Nexo presented Vauld with the terms of a potential deal twice before the negotiations ended, but they did not meet the interests of all creditors.. Vauld's creditors believe Nexo was not transparent enough about its financial position during the negotiation process.. In particular, Nexo did not respond to Vauld's requests for due diligence, including a solvency assessment, nor did it provide information that would enable creditors to better assess their actions in the event of Nexo's insolvency. After potential Nexo deal collapses, Vauld's restructuring plan includes choosing a fund manager to handle client assets. Several candidates have already been put forward for discussion. Now, Vauld's hole has grown to $98 million, while on August 1, 2022, when the company provided a financial update, the net deficit was $81 million. This is largely due to FTX's bankruptcy proceedings, Vauld claims. Vauld has until January 20 to resolve financial problems. In July, the company filed for a six-month moratorium on claims by creditors. However, the company recently requested a re-extension of protection against their claims.