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Nexo Offers to Acquire Vauld Group after Celsius's Cold Treatment

Nexo’s plan to buy a cryptocurrency lender may be coming to fruition as the company has shown interest in acquiring Vauld Group.

This development comes after Vauld Group announced earlier this week that it has halted withdrawals and other operations on its platform in the wake of the ongoing onslaught in the digital currency ecosystem.

According to a report from The Block, Nexo has signed an indicative term sheet with Vauld with a plan to acquire up to 100% of the Singapore-based company. Without financial terms revealed, the company said it will review Vauld Group’s balance sheet over the next 60 days in order to ascertain how best to support the ailing company.

“We have to see what exactly is on their books and it’s going to take a little while,” Nexo co-founder Antoni Trenchev said in an interview. “But since we have the exclusive exploratory period, we are the only ones looking at them right now.”

As a crypto lending platform, Vauld Group said it became severely distressed when it witnessed massive withdrawals to the tune of $198 million following the collapse of Terraform Labs’ LUNA and UST digital currencies. As it was unable to handle the liquidity pressures, it had to suspend its core operations.

According to Trenchev, Nexo will examine all aspects of the company’s previous asset base including whether it has long-term staked coins or other investments.

“We have to view it in the overall context of if we step in, can we restructure the business so that it is functioning again, so that it is profitable within the Nexo umbrella, which as a company is profitable and whether we can accumulate that,” Trenchev said.

The consideration for Vauld Group is strategic for Nexo which wishes to expand its operations in India and other Asian markets where the former has active operations. The proposed acquisition of Vauld Group comes after Celsius Network gave Nexo a cold treatment when it offered to buy out its collateralized loan products last month.

MAS Insists Terra, 3AC Unlicensed to Operate in Singapore

Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS) has corrected the misconception about how some of the most distressing crypto firms are linked to Singapore. Menon indicated that crypto entities like Terraform Labs, the Luna Foundation Guard or Three Arrows Capital are without proper licenses in Singapore.

In his annual report speech for the 2021/2022 financial year, Ravi said claims that Terraform Labs and the Luna Foundation Guard are “Singapore-based” is false, but rather, the duo is “not licensed or regulated by MAS, nor have they applied for any license or sought exemption from holding any license.”

The MAS boss said liquidated Three Arrows Capital is not regulated under the established Payment Services Act but” had operated under the registered fund management regime to carry out limited fund management business” in the country, an activity it has stopped and has “ceased to manage funds in Singapore prior to the problems leading to its insolvency.”

Ravi Menon also shed insights into the status of Vauld Group as an entity that is “currently not licensed by MAS nor has it sought any exemption from holding a licence under the Payment Services Act.” Menon affirmed that Vauld has “submitted a licence application, which is pending review.”

The misconceptions about the status of these companies come off as another false information flying around in the digital currency ecosystem, which Ravi Menon said the MAS has been warning the public about for the past five years. He still reiterated that retail investments in the crypto ecosystem are very risky and that it will organize a dedicated Green Shoots seminar to share its strategies for the crypto ecosystem in August.

The administration plans to broaden crypto regulation in response to the recent market turmoil in the crypto space. The MAS might further tighten retail-investor access to crypto by covering more activities, Menon disclosed without further evaluation. The consultation is expected to conduct during September and October.

The Monetary Authority of Singapore is one of the most bullish regulators when it comes to the embrace of digital currency initiatives. However, the apex bank has never compromised on its standards when it comes to granting licenses to startups offering services in the space, a move that has pushed Binance away from its application to do business in the country.

Vauld Group Disagrees with Indian Authorities for Asset Seizure

Following the freezing of Vauld Group’s owned crypto platform FlipVolt by the Indian Enforcement Directorate (ED), the embattled trading firm said it did not agree with the actions of the law enforcement agency.

Vauld Group said the entire asset freeze was fueled by the actions of just one of its clients, adding that it has always cooperated with the regulator when it requested documents or data clarifications.

“It is unfortunate that, despite extending our cooperation, the Enforcement Directorate has proceeded to pass a freezing order, pursuant to which crypto assets in the pool wallets of the company have ordered to be frozen to the extent of approximately INR 2040 million. The freezing order of the Enforcement Directorate is specific to that one customer that availed our services for a brief period of time and whose account we subsequently deactivated. We respectfully disagree with the freezing order,” Vauld Group said.

While the parent Vauld Group is currently facing capital and liquidity strain based on the current market conditions, the response to the Enforcement Directorate is evident that the startup is unwilling to add more stress to what it currently has going on.

The Enforcement Directorate has recently been in the news with its now-frequent crackdown on trading platforms. Earlier this month, the regulator seized the assets of the Binance exchange-linked WazirX exchange for allegedly helping Chinese loan apps to launder funds.

While WazirX said it is also working with the regulators, the trend in which trading platforms are brought under scrutiny is growing in more jurisdictions than just India. On the part of Vauld Group, the company, based out of Singapore, said it is always following the right regulations in all countries and is working on its legal options in the case with the Enforcement Directorate.

“We have fully cooperated with the Enforcement Directorate and will continue to extend our cooperation to ensure we continue to remain a safe place for customers to transact and own cryptocurrencies,” the company added.