Vauld CEO Darshan Bathija said in a blog post on Monday, July 5, that the Singapore-based company is facing "financial challenges" due to the "volatile market conditions, the financial difficulties of our key business partners inevitably affecting us and the current market climate." All these factors led to Vauld's clients withdrawing nearly $200 million worth of cryptocurrency assets from the platform from June 12 to the time of Bathija's announcement. (Related: "Cryptoqueen" becomes first crypto criminal on FBI's top 10 most wanted.)
Bathija added that it is currently working with its legal and financial advisors to explore what the company can do moving forward to steady its finances and protect the interests of its stakeholders, including potential restructuring options.
Vauld's suspension of all withdrawals, trading and deposits comes less than three weeks after Bathija said that the company "continues to operate as usual despite volatile market conditions." He even said in a blog post that withdrawals were being "processed as usual and this will continue to be the case in the future."
Nexo, another cryptocurrency lending company and one of Vauld's main rivals, is currently in discussions with the failing company and may be interested in buying out the competition. Nexo co-founder Antoni Trenchev announced that the company has signed a term sheet with Vauld, giving it 60 days of exclusive talks to explore an all-equity acquisition of the company.
"The completion of this transaction is pending due diligence – which both teams are working on as we speak," wrote Bathija on his Twitter account. "Vauld has strived to deliver long-term value to all customers, and we believe coming under the Nexo umbrella will significantly help achieve this."
When Trenchev was asked how much Nexo would be willing to pay to acquire Vauld, he deflected the question by saying it was "premature" to speculate on potential valuation at this point in the negotiations.
"We have a 60-day window of exclusivity where they will open up the books. You will see everything. Is there a hole? How big is the hole? Where are the assets? Who are the counterparties?" said Trenchev.
If Nexo successfully acquires Vauld and its assets, the company said it plans to restructure Vauld and make it focus on expanding in India and Southeast Asia.
Vauld is just the latest company to fall victim to the global crash in cryptocurrency asset prices, which has exposed critical flaws in many cryptocurrency projects and business models.
Other cryptocurrency lending companies like Vauld are also facing liquidity issues. Vauld isn't the first company to pause withdrawals, transactions, or deposits due to market conditions and will likely not be the last.
Nexo in early June said it was preparing an offer to acquire the assets of Celsius Network, another cryptocurrency lending and borrowing company, shortly after Celsius announced a similar freeze on withdrawals. Nexo retracted its offer after Celsius didn't want to make a deal, saying it was exploring other options such as "strategic transactions" as well as a restructuring of its debts.
Trenchev said Nexo is also in discussions with other companies about purchasing their assets. In March, the company announced a fund called Nexo Ventures, and earmarked an initial $150 million of funding for investing in "a wide range of early-stage retail and institutional projects."
"Any investment we make needs to make financial sense," said Trenchev. "We are not the Federal Reserve where we can print money at will and spend as we see fit."
Learn more about the collapse in value of crypto assets at BitcoinCollapse.news.
Watch this "Brighteon Conversations" episode of the "Health Ranger Report" as Mike Adams, the Health Ranger, talks to John Perez, the Crypto Nostradamus, about the coming wipeout in the cryptocurrency industry.