Crypto-trading platform Vauld suspends operations


Amid broader volatility in the crypto market due to several global macroeconomic factors and the recent collapse of multiple crypto-financial institutions, Singapore-based crypto-trading platform Vauld has suspended all deposit and withdrawal options. The decision came as the platform was facing financial challenges and looking at a potential restructuring.

In a
statement released on the company website on Monday, CEO, Darshan Bathija wrote, “ This is due to a combination of circumstances such as the volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate. All this has led to a significant amount of customer withdrawals over $197.7 million since June 12, 2022, when the decline of the cryptocurrency market was triggered by the collapse of Terraform Lab’s UST stablecoin, Celsius network pausing withdrawals, and Three Arrows Capital defaulting on their loans.”

The company, backed by PayPal founder Peter Thiel’s Valar Ventures, has suspended all withdrawals, trading, and deposits with immediate effect, essentially locking in the money invested by retail investors. It has engaged the services of Kroll as its financial advisor, and legal firms Cyril Amarchand Mangaldas and Rajah & Tann Singapore LLP in India and Singapore, respectively.

“We believe this will help facilitate our exploration of the suitability of potential restructuring options, together with our financial and legal advisors. We seek the understanding of the customers of the Vauld platform that we will not be in a position to process any new or further requests or instructions in this regard. Specific arrangements will be made for customer deposits necessary for certain customers to meet margin calls in connection with collateralised loans,” the CEO wrote.

The company had raised $27 million as of July last year from VCs, including Pantera Capital, Coinbase Ventures, CMT Digital, Gumi Cryptos, Robert Leshner, and Cadenza Capital. Founded in 2018 by Bathija and Sanju Kurian, Vauld provides a suite of products to crypto investors, including fixed deposits and asset-backed lending and borrowing platforms.

ET reported on June 21, that the collapse of Terra’s blockchain native token Luna – which reportedly erased $40 billion from the crypto market – has had a cascading effect. Decade-old crypto hedge fund and an active backer of Web3 startups Three Arrows Capital has filed for bankruptcy. Crypto lender Celsius network is reportedly exploring options including deals and restructuring its liabilities and
has laid off 150 employees.

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In June, Vauld announced it had laid off 30% of its workforce, most of whom were based in India.

“Our management remains fully committed to working with our financial and legal advisors to the best of our abilities to explore and analyse all possible options, including potential restructuring options that would best protect the interests of Vauld’s stakeholders,” Bathija stated in his note.

The company is planning to apply for a moratorium in the Singapore court, i.e. “a suspension of the commencement or continuation of any proceedings against the relevant companies to give breathing space to carry out the proposed restructuring exercise”.

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