5 July, 2022- Vauld, a Singapore based Crypto lender which recently had to freeze client withdrawals and bring in advisers for a potential restructuring, is currently in discussions to be bought by rival Nexo.
The speed of the market meltdown has ensnared crypto lenders with some, like Vauld, freezing withdrawals just weeks after ensuring customers that their business was sound.
Vauld became the latest among several crypto lenders to resort to emergency measures to stay afloat after a $2 trillion digital-asset market rout sapped their finances. They pointed to a combination of volatile markets, financial troubles at “key business partners” and a jump in withdrawals since June 12 in its statement announcing the freeze. Trenchev also indicated that the company’s own actions might have contributed to its difficulties but declined to elaborate on what those investment decisions were.
Vauld co-founder Antoni Trenchev said in a recent interview that it had suspended withdrawals, trading and deposits on its platform and was in talks with potential investors after facing “financial challenges.”
Nexo is now conducting an exclusive 60-day due diligence process and, upon successful completion, plans to acquire up to 100% of Vauld and reorganize its operations to deepen its presence in Asia.
Tatiana Metodieva, CFA, Nexo’s Head of Corporate Finance & Investments said, “We sympathize with all affected by the drastic market downturn. However, difficult times always teach us the importance of business model viability and prudent risk management. It is inevitable that the industry leaders will navigate out of the current crisis on the foundation of competitive strength, discipline, and uncompromising responsibility to customers. Nexo welcomes a dialogue with investors in all of the prominent digital asset lending platforms on a new and sustainable way forward through its strategic contribution of bespoke corporate governance, improved revenue generation, and optimized operating cost structure.”
In parallel, Singapore regulators are taking note of the crypto industry’s trouble and say they’re moving to bolster guardrails. Hours after Vauld’s announcement to freeze client withdrawals, Singapore’s central bank said it was considering new crypto rules to protect consumers.
“These may include placing limits on retail participation, and rules on the use of leverage when transacting in cryptocurrencies,”Monetary Authority of Singapore Chairman Tharman Shanmugaratnam said in a written response to a question from parliament.
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