Nexo Rules Out Terminating Crypto Lender Vauld Bailout
Nexo dismissed rumors of ending talks of acquiring troubled Vauld. The update by Nexo confirmed that the negotiations were ongoing. In response to the alleged disagreements, Nexo indicated that Vauld’s future rests upon the decision of its creditors’ committee.
Disputing the Rumors of Terminating Vauld Takeover
The update conveyed by Nexo on December 26 ruled out the influence of Vauld’s chief executive. Nonetheless, Nexo pointed out that the talks’ collapse was triggered by a leaked email from Vauld’s founder Darshan Bathija notifying the creditors yet to yield fruits.
Vauld liquidity crisis is traced to June when the crypto lender suspended withdrawals. It prompted Vauld to seek protection in a Singaporean court against claims from creditors and ongoing lawsuits. The move by the embattled crypto lender mirrored the Chapter 11 bankruptcy filing sought by US firms facing a liquidity crunch.
Vauld disclosed in the court documents submitted to the Singaporean Court owing $402 obligations to creditors. The crypto lender identified the bankrupt FTX exchange as one of its creditors.
Exclusivity Agreement Valid
Nexo’s objective of acquiring Vauld is ongoing since the agreed exclusivity period has yet to lapse. Nexo decried the rumours as overlooking the finer details of the agreement. It retaliated that the exclusivity deal was binding and neither of the parties could call off the negotiation.
Nexo added that the terms included in the exclusive talks could only be called off through mutual agreement; that is not the case as alleged. Nexo’s Kalin Metodiev confirmed that they are yet to give up on saving Vauld and facilitating creditors to recover their funds.
Nexo’s letter to the Vauld’s creditors featured an amended proposal lamenting that its acquisition efforts were hindered by slow receipt of diligence information. Besides bias from the Singapore-based process administrator – Kroll, the transaction team was furnished with incomprehensible financial details.
Criticism of Process Administrator
Nexo criticized actions undertaken by Kroll to orient the solution towards placing Vauld in active management instead of lending. Active management was likely to be subject to creditors, which would expose the former creditors to the aggravated risk of relying on aggressive return forecasts to recoup loss incurred.
Metodiev noted that Vauld was held hostage by individuals pursuing self-serving agendas. The managing partner at Nexo expressed disappointment since a few individuals were denying creditors the opportunity to optimize the recovery of their funds.
The revised proposal by Nexo portrays a shift from the initial plan to phase out the US operations where Vauld has multiple clients. Instead, Next will retain all customer bases and take over all cryptos attributable to the clients and obligations from the acquired assets.
Nexo assured the resumption of customers’ borrowing, earning and exchanging against the cryptos held. Besides, Nexo proposes to inject additional capital, minimize the asset deficit by 10% to new clients and eliminate the lock-up period imposed on asset withdrawals.
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