Axios Pro: Fintech Deals

January 06, 2023

Axios Pro Exclusive Content

Happy Friday, fintechnicians. We made it.

Situational awareness: If you'll be at the 2023 World Economic Forum in Davos, join Axios for an event with MIT Media Lab Digital Currency Initiative director Neha Narula on what's ahead for the crypto industry. RSVP here.

1 big thing: Vauld rejects Nexo proposal

Illustration of a torn photograph of two hands shaking

Illustration: Annelise Capossela/Axios

Bankrupt crypto lender Vauld and its committee of creditors have rejected the latest — and purportedly final — acquisition offer from London-based rival Nexo, Ryan writes.

Why it matters: A wave of bankruptcies in the crypto ecosystem has left embattled firms with few options and even fewer potential acquirers to save them from restructuring.

Driving the news: In a letter first reported by The Block, Vauld rejected Nexo's proposal due to concerns over the latter firm's financial health.

  • It also questioned how Nexo would treat U.S.-based customer claims after the potential acquirer announced in early December that it was exiting the U.S. market.
  • "We have taken the terms of the Final Nexo Proposal into consideration and further consulted with the COC, and we unanimously do not accept your proposal as it stands," Vauld CEO Darshan Bathija wrote.

The other side: In an open letter on Thursday, Nexo struck back, saying, "Darshan Bathija and his clique do not have their creditors' best interest in mind."

  • "[T]hey are doing everything they can to push aggressively for a questionable deal with an affiliated obscure fund manager that... will most certainly result in the total loss of whatever little assets are still left on Vauld's balance sheet."

Context: The deal has been in the works for months and was announced shortly after Vauld halted withdrawals while facing a liquidity crunch in the wake of the Terra and Three Arrows Capital collapses.

  • Vauld first signed a term sheet to have Nexo acquire up to 100% of the company in early July.
  • In September, Nexo extended its exclusivity period with Vauld to conduct further due diligence.
  • It submitted a revised proposal on Dec. 2 and a so-called final offer on Dec. 26 in an open letter to Vauld creditors.

What we're watching: Vauld faces a Jan. 20 deadline to work out a restructuring plan as part of its bankruptcy process after receiving an extension from the bankruptcy court in November.

  • The company has applied for another extension, with a hearing scheduled for Jan. 17 to evaluate the request.

View archive