Troubled cryptocurrency lender Wald has been thrown a lifeline from larger rival Nexo in a sign of increasing consolidation in the cryptocurrency market.
Nexo on Tuesday said it has signed a term sheet with Wald, giving it 60 days of exclusive talks to ascertain all equity acquisitions in the company. If successful, Nexo said it plans to restructure the company and expand into Southeast Asia and India.
vault on monday discontinued operations And said it was exploring restructuring options due to the “financial challenges” posed by the cryptocurrency’s sharp decline. Singapore based company backed by fans coinbase and the billionaires of Silicon Valley Peter Thiel,
It is the latest firm to be caught in the chaos that has gripped the crypto world. Just last month, Celsius, another crypto lending firm, placed an indefinite moratorium on withdrawals, citing “extreme market conditions”. Meanwhile, Three Arrows Capital, a crypto hedge fund, applied for bankruptcy protection after falling into liquidation.
Asked how much Nexo is willing to pay for Wald, co-founder Antoine Trenchev said it was “premature” to speak about valuations at this stage. However, he said he was “optimistic” about reaching a deal.
“We are starting due diligence,” the head of Nexo told CNBC. “We have a 60-day window of exclusivity where they’ll open the books. You’ll see everything. Are there any holes? How big is the hole? Where are the assets? Who are the counterparties?”
Nexo had previously given a letter of intent to Celsius to buy the company, though it said the company rejected its offer.
To turn to the government, several crypto firms have sought the help of their peers in hopes of a bailout.
Sam Bankman-Fried, the billionaire behind crypto exchange FTX, has become a lender of last resort to the industry. Last week, FTX signed a deal giving it the option to buy crypto lending firm BlockFi, while Bankman-Fried’s quant trading shop Alameda Research also extended a line of credit to Voyager Digital, a beleaguered crypto brokerage that had previously reported All operations were stopped in ,
Tranchev compared the current market situation to the “Terror of 1907”, a series of bank runs triggered by the collapse of highly leveraged speculative bets.
“I think we are going to see a period of consolidation and mergers and acquisitions. And it will end with fewer companies, but stronger with better business practices,” he said.
bitcoin was worst month on record In June, it lost over 38% of its value. The world’s largest cryptocurrency is down more than 50% since the start of 2022.