Crypto lender Vauld has reportedly axed a potential acquisition by rival Nexo.
“We were previously exploring a possible acquisition by Nexo as part of the proposed restructuring plan,” Vauld wrote in a private message on Twitter posted by Coinbase on Monday (Dec 26). “To provide a very brief summary, our discussions with Nexo have unfortunately not come to fruition.”
However, according to a source familiar with the situation, negotiations are ongoing. Nexo, the news outlet reported, is still interested in the deal.
“Nexo has not given up on its effort to save Vauld and help its creditors recover as much of their funds from the platform as possible,” co-founder and managing partner Kalin Metodiev told Coinbase.
With a month left before the deadline, the possibility of the deal collapsing is still on the table as Vauld files a restructuring report with its creditors.
The Singapore-based company, which is based in the United States, sought bankruptcy protection in July, part of a group of cryptocurrency firms that stopped withdrawals due to market instability in digital assets.
Since then, the platform has recovered about $200 million in crypto. June. Vauld also laid off 30% of its workforce, reduced hiring, and cut executive compensation in half.
Nexo announced plans to acquire Vauld in July, claiming it would “reorganize its future operations with the aim of accelerating its deeper presence in Asia.”
However, months of negotiations to make this deal a reality have not yielded any results. In an email to creditors published by Bloomberg News, Nexo said he had seen “challenges” during the months of negotiations, “defamation” and “the spread of misinformation on social media.”
Another problem: Nexo decided earlier this month to shut down its US business due to “a dead end” in talks with federal and state regulators.
“Unfortunately, it is now clear to us that despite rhetoric to the contrary, the US refuses to provide a path forward to enable blockchain businesses and we cannot provide our customers with confidence that regulators will focus on their best interests,” Nexo said in a blog post.
That’s bad news for Vauld? As Bloomberg reports, 40% of its US customers will not benefit from the Nexo acquisition.
PYMNTS wrote last week that these issues will occur at the end of an entire year in which the “cryptocurrency industry fully entered the mainstream, and nearly drowned.”
The industry, which has its roots in the 2008 recession, was not around when inflation and interest rates rose to historical levels.
The crypto market’s value plummeted due to investor pullbacks and policy tightening, which took the industry by surprise. This is nearly half the drop from the peak of $3 billion in 2021.
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