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UK Crypto Lender Nexo Offers To Bail Out Troubled Vauld

London-based Nexo said it would buy up to 100% of Vauld and ‘reorganize its future operations with the aim to accelerate its deeper presence in Asia’


The top US consumer watchdog said on Tuesday it plans to intensify its scrutiny of the use of cryptocurrencies.
Crypto has come under increasing scrutiny in recent months after the market cratered, toppling some companies and leaving customers holding worthless assets. File photo: Reuters.

 

Cryptocurrency lending platform Nexo said it plans to acquire crypto exchange and fellow lender Vauld, which suspended withdrawals for more than 800,000 clients on Monday.

In the latest sign of consolidation in the digital currency industry as prices tumble, London-based Nexo said it would buy up to 100% of Vauld and “reorganize its future operations with the aim to accelerate its deeper presence in Asia”.

Nexo aims to “provide immediate assistance and alleviate withdrawal limitations put in place on Vauld’s platform,” the statement said.

Nexo did not say how much it planned to pay for Singapore-based Vauld, nor when the deal would close.

 

Unregulated Banks for Crypto World

Acting as unregulated banks for the crypto world, crypto lenders take in deposits from retail investors, offering returns as high as 20%, and lend digital tokens to borrowers.

Crypto lending has boomed over the last two years but has run aground in recent months following a crash in cryptocurrency prices and the collapse of major token TerraUSD in May.

US lender Celsius, which had more than $11 billion in assets, stopped allowing customer withdrawals and transfers in June, citing extreme market conditions. Another lender, Voyager, suspended withdrawals last week.

Vauld’s chief executive Darshan Bathija told a newspaper in May that it had $1 billion in assets under management.

In a blog post on Monday, Vauld said it was facing “financial challenges” due to volatile market conditions, “the financial difficulties of our key business partners inevitably affecting us” and customers having withdrawn around $200 million since June 12.

 

  • Reuters with additional editing by Jim Pollard

 

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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