QUICK TAKE:
- Vauld and Nexo fail to conclude on terms of the agreement for a pending deal.
- Lack of transparency was identified as one of the reasons for the futile talks.
Across the board, several Crypto firms are entering into partnerships as a means of remaining afloat. While some have recorded a measure of success, others have not. One such example is Vauld which was supposed to have been acquired by Nexo. The latter pulled out of the proposed deal for some of the following reasons:
- A sizable proportion of Vauld’s funds are tied down with both FTX and Terraform Labs. There is uncertainty around this which cannot be risked by Nexo.
- Nexo announced in early December that it will phase out its products and services from the United States in the coming months, due to the inability to reach an agreement with the host country on regulatory standards. The US is one of Vauld’s biggest markets and so, this deal is not in the overall interest of Nexo.
On its part, the executives of Vauld feel that the action of Nexo is anything less than straightforward. Reference was made to the fact that there are no clear-cut measures disclosed as to the financial adequacy of the Swiss-based Crypto borrowing and lending firm, or as to how it would treat its investors’ interests in the event of a bankruptcy crisis.
The Alternative: Appoint a Trustee
Vauld’s next decision is to engage a funds administrator, and this will be followed by drawing up the guiding principles of operation in conjunction with its creditors. The preferred candidate will be unveiled next year from a team of two that it has already shortlisted.
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