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conditions, “the financial difficulties of our key business partners inevitably affecting us” and customers having withdrawn around $200 million since June 12.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