Nexo was one of the few companies that emerged unscathed after the FTX collapse which saw the crypto market lose over $250 billion. It was able to protect itself and has been trying to save other companies that are “in need” for some time, but it failed.
The crypto market was hit hard by the FTX collapse in Q2 and Q3 2018, when companies such as Celsius and Voyager declared bankruptcy. Vauld, a crypto lending platform, filed for bankruptcy in July 2018.
Soon thereafter, the company entered into an agreement with Nexo, its rival, in which Nexo was to acquire Vauld, and then pull it out of bankruptcy. Vauld, however, decided to cancel the acquisition five months after the original deal. The company said in a statement to Coindesk the following:
“We had previously explored a Nexo acquisition as part of our proposed restructuring plan. We have been in discussions with Nexo but they have not agreed to any of our plans.
Nexo, on the other hand, did not cancel the deal but was trying to continue negotiations. The cryptocurrency lender wants to save Vauld, and help the platform’s creditors get their money back.
After California opened an investigation into Nexo in September, it was reported that Nexo was in the crosshairs of regulators. The inquiry was led by the California Department of Financial Protection and Innovation, along with seven other state securities regulators.
Nexo made the announcement earlier this month that it would be leaving the United States. The reason for the company’s announcement was the fallout with regulators. It stated that it would gradually phase out its products over the next few months.