According to several sources on Jan. 5, cryptocurrency lending startup Vauld has rejected a long-standing purchase bid from its larger rival, Nexo.
Vauld co-founder and CEO Darshan Bathija informed Nexo in a private letter that his company will reject a final offer made by Nexo.
Vauld claimed that Nexo had not offered a determination of its solvency. It also expressed worries about how Nexo would deal with Vauld consumers in the United States given that Nexo said in December that it would stop catering to the nation's citizens. Vauld came to the conclusion that neither of the matters was assured by Nexo's updated suggestions.
Bathija stated in the letter of rejection:
“We have taken the terms of the Final Nexo Proposal into consideration and further consulted with the [committee of creditors], and we unanimously do not accept your proposal as it stands.”
Since July of last year, Nexo's acquisition proposal has been under discussion. Following the failure of Celsius, Vauld was one of many businesses that declared bankruptcy last summer, prompting it to seek help from Nexo.
The planned deal, however, encountered difficulties in the months that followed, and Nexo repeatedly altered their suggestion. A final offer for Vauld was included in an open letter published by Nexo just hours before news of his final rejection on January 5 broke.
The final offer would have seen Nexo acquire Vauld's customer base, its crypto assets, its clients' crypto assets, its cash, and numerous other assets and liabilities. Nexo dubbed that proposal "the greatest feasible way forward" and "the only path forward."
The agreement would have converted Vauld clients into "New Nexo Customers" and moved outstanding debt into "New Nexo Accounts."
Additionally, Nexo stated in the letter from yesterday that it intended to implement a breakup clause requiring Vauld to pay $20 million. Despite the fact that the two businesses initially agreed to an exclusivity period of 60 days, that agreement was later extended by an additional 30 days until October 2022. The extent to which the firms extended the agreement and whether Nexo thought Vauld had already broken it are also unknown.
The intended transaction between Nexo and Vauld was unclear in reports from last month. Vauld said that talks had broken down, while Nexo asserted that it was still open to pursuing a deal and made an updated proposal.
The conflict has been resolved as a result of this week's events, and it now appears that Vauld will collaborate with a fund manager Nexo has criticized. Based on cryptocurrency values at the time of its bankruptcy, Vauld was claimed to owe its clients more than $400 million.