Vauld Applies for Protection Against Creditors After Pausing Withdrawals

Due to the volatile market conditions, deposits, withdrawals, and trading were halted by Vauld on July 4.

Vauld Applies for Protection Against Creditors After Pausing Withdrawals

Photo Credit: Unsplash/ Quantitatives

A Singaporean moratorium order is similar to Chapter 11 bankruptcy in the US

Highlights
  • Vauld filed an application in Singapore seeking a moratorium order
  • Nexo earlier revealed plans to buy all 100 percent of Vauld
  • Crypto lending has boomed over the last two years
Advertisement

Singapore-based cryptocurrency lender Vauld has filed for protection against creditors in a bid to allow the troubled company more time to restructure its business after collapsing asset prices impacted its operations earlier this month. Vauld filed an application in Singapore on July 8 seeking a moratorium order that would go a long way in buying the company time without risking closure. The court order reveals that the troubled crypto lender owes a total of $125 million (roughly Rs. 1,000 crore) to its 20 largest unsecured creditors, as well as $35 million (roughly Rs. 280 crore) to an unnamed secured creditor, and another $4.1 million (roughly Rs. 32.8 crore) to secured creditor FTX Trading Ltd.

Vauld issued a statement on July 11 informing the public that it would pursue a moratorium order to give management "the breathing space it requires to prepare for the intended restructuring for the benefit of all stakeholders." However, as per a Wall Street Journal report, the moratorium application was filed three days prior.

As per a statement provided to WSJ, a moratorium in Singapore is similar to a Chapter 11 bankruptcy in the US, although it does help the company "avoid a complete cease of operations and liquidation of assets".

On July 4, Vauld suspended deposits, withdrawals and trading due to adverse market conditions, capping off a volatile three-week stretch where customers tried to withdraw nearly $198 million (roughly Rs. 1,584 crore) from the platform. Around the same time that Vauld was experiencing a run-on asset, CEO Darshan Bathija announced that his company would be cutting 30 percent of its staff.

Meanwhile, cryptocurrency lender Nexo revealed plans to buy fellow lender Vauld and buy up to 100 percent of Vauld and "reorganise its future operations with the aim to accelerate its deeper presence in Asia."

Acting as unregulated banks for the crypto world, crypto lenders take in deposits from retail investors, offering returns as high as 20 percent, and lend digital tokens to borrowers.

Crypto lending has boomed over the last two years, but has run aground in recent months following a crash in cryptocurrency prices and the collapse of major token Terra in May.


Noise co-founder Amit Khatri joins Orbital, the Gadgets 360 podcast, for a special episode. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
Affiliate links may be automatically generated - see our ethics statement for details.
Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Cryptocurrency, Vauld, Singapore
Tata Green Batteries Partners With Tata Motors for Vehicle Battery Solutions Across India
Facebook Gadgets360 Twitter Share Tweet Snapchat LinkedIn Reddit Comment google-newsGoogle News

Advertisement

Follow Us
© Copyright Red Pixels Ventures Limited 2024. All rights reserved.
Trending Products »
Latest Tech News »