Crypto crash fuels acquisition spree, raising privacy concerns

Nexo, a crypto-lending platform with over 4 million users, has offered to acquire Singapore-based crypto services firm Vauld. Vauld management said in a blog post that Terra-Luna’s coin crash and Three Arrows Capital’s loan default sparked its financial difficulties.

Why should we care?
Vauld suspended deposits and withdrawals on its platforms, leaving its 800,000 users, who are primarily in Asia, high and dry. Vauld appeared better prepared for a downturn than Three Arrows Capital, having downsized by 30% and having prepared for a wholesale restructuring to avoid collapse. But that wasn’t enough, highlighting the severe—and seemingly unavoidable—effects of current crypto volatility. Nexo said it wants to grow operations in Asia through a Vauld acquisition. But several concerns remain: Will Vauld users, whose assets are currently frozen, regain access to their crypto wealth? How will Nexo leverage Vauld’s existing data, and do those uses fall in line with Vauld users’ privacy expectations? This acquisition—and, presumably, the many others to follow—might let larger crypto players consolidate the market for their gain, but everyday crypto holders may lose assets or agency in the process.