After freezing withdrawals, Vauld in talks to be bought by Nexo

Posted: 7 July 2022 6:16 pm

Vauld is one of several troubled crypto lenders to seek emergency funding amid a downturn that’s wiped $2 trillion in value from the crypto markets.

Nexo, a leading crypto lender, is exploring the acquisition of Vauld after the latter suspended deposits and withdrawals, blaming volatile market conditions.

Nexo signed a 60-day deal giving it exclusive rights to acquire Vauld, pending due diligence, the companies said.

Facing a cash crunch and nearly $200 million in withdrawals, Vauld had earlier suspended trading and said in a statement it would seek restructuring.

A Nexio acquisition may be the best-case scenario for users who have their funds trapped at Vauld.

What is Vauld?

Vauld is a Singapore-based cryptocurrency lender with heavy market penetration in India. The company serves more than 800,000 users in Asia, which makes it an attractive acquisition target for competitors.

In 2021, Vauld raised $25 million in a funding round led by Peter Thiel’s Valar Ventures, Pantera Capital and Coinbase.

The company is similar to Celsius and Nexo. Users can deposit a variety of crypto assets, including Bitcoin and stablecoins, and earn yield on a daily basis. Some assets earned yields north of 10% annually.

Users who deposit crypto-assets can use them as collateral and borrow other crypto assets by paying interest.

“We are facing financial challenges despite our best efforts,” said Vauld’s CEO Darshan Bathija in a blog post. “This is due to a combination of circumstances such as the volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate which has led to a significant amount of customer withdrawals.”

What is Nexo?

Nexo is a popular crypto lender that offers exchange services with more than 300 market pairs, as well as crypto lending and borrowing. The company has more than 4 million users worldwide.

If the transaction is successful, Nexo will acquire 100% of Vauld and reorganize its operations to accelerate its presence in Asia.

The company said in a blog post that “Nexo will concurrently explore the integration of a wider retail and institutional product range, strong liquidity, legal and regulatory expertise, unparalleled automation, risk management and the best business practices.”

What it means for Vauld investors

The most important part for investors would be the release of locked funds. Nexo said it “aims to provide immediate assistance and alleviate withdrawal limitations put in place on Vauld’s platform.”

If Nexo does acquire Vauld, investors would again be able to withdraw their funds and trade, and might also get access to Nexo products and a potentially higher yield on their deposits.

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Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Kliment Dukovski owns cryptocurrencies as of the publishing date.

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