Nexo said it has signed an indicative term sheet with Vauld with a plan to acquire up to 100% of the Singapore-based company. The term sheet grants London-based Nexo a 60-day exclusive exploratory period in which it will conduct due diligence.

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

Client withdrawals will remain halted for now.

Trenchev said Nexo could restructure or refinance Vauld depending upon how the due diligence process goes. That is, if Vauld has some assets staked for longer periods or has made investments for a long duration, Nexo could take those and instantly provide liquidity. On the other hand, if their assets have been lost, Nexo could potentially replenish them if it makes sense, said Trenchev.

"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.

As to why Nexo is interested in Vauld, Trenchev said Vauld has "huge traction in India and Southeast Asia, which are important markets to us."

At its peak, Vauld had assets under management of close to $1 billion, Bathija told The Block.

A person with knowledge of the situation told The Block that the hole is worth "mid to high double-digit millions," which is less than $100 million.

Operating under the Nexo umbrella puts us instantly in a position of strength to continue the execution of our fiduciary obligations to our customers and at the same time to execute upon both companies’ ambitious roadmaps, regardless of the market conditions,” Bathija said in a statement.