Popular crypto lending platform, Nexo, plans to buy its competitor, Vauld. The Singapore-based firm recently said it looked at options to restructure the company.
Meanwhile, Vauld paused operations on its platform. The lending company is facing financial difficulties amid the ongoing crypto market crisis.
Nexo Acquires Agreement to Investigate Vauld’s Purchase
The crypto market has been in crisis in the past month due to declining prices. The crypto market downturn has affected several crypto lenders such as Celsius and Vauld.
However, Nexo has offered the Vauld company a way out. On the 5th of July, the crypto lending platform said it had signed an exclusive agreement with Vauld. As a result, Nexo has 60 days to explore and discuss its plans to acquire the rival firm.
On the 4th of July, the management of Vauld decided to halt operations on its platform. It cited the volatile market and financial challenges as reasons for its actions.
Furthermore, Vauld’s partners also blame the crypto winter for its present condition. Customers have withdrawn over $198 million in three weeks from the platform.
Despite the ongoing market crisis, Nexo said it is well-capitalized to help the falling sector. As a result, the firm has shifted its attention towards expansion.
If the exploration of Vauld is successful, Nexo plans to buy the whole company. Afterwards, it will reorganize its activities and fight for more presence in the Asian continent.
Nexo To Add More Institutional Products To Vauld
The head of Corporate Finance at Nexo, Tatiana Metodieva, stated that:
“We are not happy about the present market downturn. However, this period teaches companies the importance of risk management. However, it is uncertain if all affected crypto companies will survive the current crash.”
Meanwhile, Nexo said it would remove withdrawal limitations and assist Vauld. Furthermore, the firm plans to include other products and services on the platform.
Darshan Bathija, CEO of Vauld stated that:
“Operating under Nexo will help to strengthen the company. Consequently, we can provide more services to our users depending on the market situation.”
Over the past years, the cryptocurrency lending sector witnessed tremendous growth. However, the recent crypto market slump has affected the industry.
Also, the fall of TerraUSD in May contributed to the ongoing market crisis. This is because several crypto firms had invested in stablecoin.
In June, the crypto lending platform, Celsius, paused withdrawals due to market conditions. Some days ago, another crypto company, Voyager, followed suit and even filed for bankruptcy.