Nexo once again extends due diligence period on potential Vauld deal

Quick Take

  • Nexo has once again extended its exclusive due diligence period on a potential Vauld deal.
  • A source tells The Block that Nexo is “cautiously optimistic” about the deal.

Crypto lender Nexo has again extended the due diligence period to decide on its potential acquisition of Vauld, an embattled rival, a person with direct knowledge of the matter told The Block.

Nexo initially signed a 60-day exclusive due diligence agreement with Vauld on July 5, a day after Vauld halted client withdrawals. That agreement was extended by 30 days last month and it expired last week.

Now the new extension would be "as long as needed," the person said, adding that Nexo is "cautiously optimistic" about the potential deal after meeting Vauld's executives in Singapore.

Last week, Nexo co-founder Kalin Metodiev said in an ask-me-anything session that the due diligence period has been extended, without providing a specific timeline. Metodiev said "any distressed transaction is not easy" and that Nexo is hopeful for a win-win situation.

"I'm happy to say that our conversations at the executive level at Vauld have been going very well," said Metodiev. "We feel that we see this path forward in a very similar way that not only we care about how we can help people recover their losses immediately, we also have a plan for how this can happen over a more extended period of time."

Metodiev went on to say that the ultimate plan if the deal goes through is to let Vauld users have their balances restored to the largest possible extent and provide them with the Nexo platform where they can find a new home. "Hopefully it's a win-win situation for everybody in the long term," he said.

While Nexo could theoretically take as long as it needs to decide on the Vauld deal, it will be limited by court timelines.

Vauld has until Nov. 7 to decide its path forward, having received three months from the Singapore High Court in August to continue exploring its options. After that date, Vauld could be forced into liquidation unless the court grants another extension.

Vauld owes $402 million to creditors, as The Block has reported previously. Of that sum, $363 million — or 90% — comes from individual retail investors' deposits.

If the Nexo deal doesn't happen, Vauld has said it has other plans, including raising more capital, waiting for some of its deployed money to be returned, converting debt to equity and issuing its own token. 

Vauld did not respond to a request for comment. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.