(Bloomberg) -- Tensions have escalated in a simmering dispute between two crypto lending rivals, both facing the steep downturn in the digital asset market. In an open letter Thursday, Nexo Capital Inc. accused troubled crypto startup Vauld of not acting in the best interests of its creditors. 

Nexo, which is attempting to acquire Vauld, said that the company was rebuffing it and pushing for a “questionable” deal with an affiliated fund manager. The letter said that this alternative arrangement “will most certainly result in the total loss of whatever little assets are still left on Vauld’s balance sheet through speculation and hefty management fees.” 

Nexo urged creditors to seek an independent third-party administrator, which it said could help ensure the fairness of the voting process and results. Vauld did not immediately respond to a request for comment. 

The conflict between Nexo and Vauld is just the latest setback for the crypto lending space, which has recently seen Celsius Network file for bankruptcy, big layoffs at Genesis Global Trading Inc. and a massive loss for Silvergate Capital Corp. Nexo and Vauld have also faced their own hardships. 

Nexo said last month that it is phasing out its products and services in the US after facing multiple cease-and-desist orders from regulators over its interest-earning products. The company is also being sued in London by investors who allege that they were prevented from withdrawing parts of their $126 million in assets from the platform in March 2021, when the price of Bitcoin surpassed $54,000. 

Singapore-based Vauld froze customer withdrawals in July and hired advisers to explore a restructuring. The Singapore High Court granted Vauld’s parent company, Defi Payments Ltd., a three-month period of protection against legal action from creditors that was supposed to end Nov. 7. The company now has until Jan. 20 to present a restructuring plan to creditors. 

Vauld, which once promised customers investment yields as high as 13%, previously raised $25 million in a funding round led by Peter Thiel-backed Valar Ventures in 2021. Coinbase Ventures and Pantera Capital also invested in the startup. 

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