Pot Calls Kettle Black

Market Meditations | January 9, 2023

As one of the victims of market conditions, crypto lender Vauld was given a ray of hope late last year but those left holding their breath may be about to come up for air.

  • Vauld suspended customer withdrawals last year due to “financial challenges despite our best efforts” after users withdrew $198 million.
  • In July 2022, Nexo stepped in with an offer to buy the rival company and signed a term sheet with Vault setting aside 60 days to explore an all-equity acquisition of the company.
  • On December 26th, Nexo presented a proposal to Vauld’s creditors which was soundly rejected shortly afterward. 
  • Vauld CEO Darshan Bathija responded to Nexo, writing. “Overall, you have failed to adequately respond to our repeated requests (which echoes the COC’s requests) for a comprehensive due diligence exercise including a solvency assessment of Nexo”.
  • Vauld’s rejection came with terms of giving Nexo until Friday to respond to the identified concerns.

So are Vauld’s concerns regarding Nexo’s solvency justified?

For the moment, all concerns focus on the lack of access Vauld has been granted into Nexo’s financial model, not explicit alarm. According to a statement from one of Vauld’s creditors, the firm wants “ironclad assurance that Nexo is solvent, so we don’t get swept up into another insolvency crisis.”