key takeaways
- Nexo has signed an indicative term sheet with Wald, giving it a special 60-day search period to acquire the firm.
- Wald halted customer withdrawals on Monday, saying it is “facing challenges” due to extreme market conditions.
- Several other crypto firms have faced similar issues in recent weeks due to the collapse of Terra, the Three Arrows Capital crisis and the broader market collapse.
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Wald is one of the many crypto lending firms facing insolvency issues due to the downturn in the crypto market.
Nexo wants to acquire Wald
Nexo is planning to acquire Wald.
In a Tuesday press release shared with crypto briefingNexo disclosed that it had signed an indicative term sheet with Wald, giving it a special 60-day period to explore a potential takeover. Nexo is looking to acquire up to 100% of the firm to expand its presence in Asia, the press release said.
On Monday, Wald announced it was halting customer withdrawals after it acknowledged it was “facing challenges” amid market volatility. A blog post revealed that clients had withdrawn $197.7 million since June 12, resulting in a liquidity crisis.
The collapse of crypto lender Terra, the bankruptcy of Three Arrows Capital, and the general decline in crypto asset prices is the latest of several firms to be in serious trouble, following the likes of Celsius, Voyager Digital, BlockFi, Babel Finance, CoinFlex, and Binance. Loan. As the market plunges, crypto lenders have been hit particularly hard as customers rush to withdraw funds for fear of falling prey to insolvency issues. BlockFi announced Friday that it had offered an additional $400 million rolling credit facility with FTX.US to acquire up to $240 million, while Nexo last month reached out to Celsius for potential asset purchases. went. Withdrawals (No firm has shared any update on the offer yet).
Nexo’s press release compared the recent events to the 1907 bank panic, citing “excessive leverage in the system” as a primary factor in the market-wide crisis. The firm said it was “in a position to help distressed industry participants” and revealed that it had hired two top Wall Street institutions to advise on potential acquisitions.
Nexo outlined plans to provide emergency support for Wald to continue to honor customer withdrawals, saying the troubled firm’s presence in the Southeast Asian market is in line with its own goals. It also said it would consider integrating more retail and institutional products, providing liquidity, providing legal and regulatory expertise, and assisting with risk management practices.
Although the acquisition will be confirmed only if Wald satisfies the requirements of Nexo’s due diligence investigation, Wald’s CEO and co-founder commented that he is pleased that his firm has found a possible way out. He added, “Working under the umbrella of Nexo, we are positioned to continue the execution of our fiduciary obligations to our customers as well as execute on both companies’ ambitious roadmaps regardless of market conditions. ”
Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.