04 Jul Crypto Lender Vauld Suspends Withdrawals, Company Is Discussing ‘Restructuring Options’ With Advisors
On July 4, the crypto lending company Vauld announced it suspended withdrawals, trading, and deposits after disclosing the firm is “facing challenges.” While not naming any specific companies, the Singapore-based cryptocurrency lending platform and exchange mentioned “financial difficulties” stemming from “key business partners.”
Vauld Suspends Withdrawals Over ‘Financial Difficulties’
During the last 30 days, a number of cryptocurrency lending platforms have revealed that their finances are not very sound. For instance, the crypto lender Celsius paused “all withdrawals, swaps, and transfers between accounts,” on June 12, 2022. Furthermore, on July 1, Voyager announced the crypto company was “temporarily suspending trading, deposits, withdrawals and loyalty rewards.”
Vauld revealed it was doing the same on Monday, July 4, when the company tweeted: “We are facing challenges despite our best efforts. 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,” Vauld’s founder Darshan Bathija wrote. The Singapore-based crypto startup added:
This has resulted in significant customer withdrawals in excess of $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 3AC defaulting on loans.
Vauld continued by highlighting that the startup is currently working with financial and legal advisors in India and Singapore. The firm also mentioned the company is talking about restructuring options with the advisors and methods that would “best protect the interests of Vauld’s stakeholders.” Vauld intends to apply with the Singapore courts to protect the firm from any proceedings and ask for time so Vauld can have “breathing space to carry out the proposed restructuring exercise.” Vauld’s Twitter announcement continued:
In the meantime, we have made the difficult decision to suspend all withdrawals, trading, and deposits on the Vauld platform [effective immediately].
Bathija says that the company believes the suspension will help Vauld explore potential restructuring options. While Vauld mentioned a massive number of withdrawals took place on June 12, the same day Celsius paused operations, Blockfi’s co-founder Zac Prince noted that his company witnessed a significant “uptick in client withdrawals” that day as well.
Following Vauld’s announcement, customers were not pleased with the operations freeze. “Please confirm if user funds are safe or not?” one individual replied to Vauld’s Twitter thread. “I thought Vauld has $100 [million] insurance,” another person asked. “That [insurance] protected from hacks, not bankruptcy,” a random individual said responding to the insurance question.
Vauld is backed by well known firms like Pantera Capital, Valar Ventures, and Coinbase Ventures. The company also reduced its staff by 30% on June 21 over “uncertain” market conditions, according to an announcement from the startup’s founder, Bathija. To date, the crypto lender Vauld has raised $27.5 million from investors.
Nick Saponaro, founder and CEO of crypto payment platform Divi Labs, commented on the Vauld situation in a note sent to Bitcoin.com News. “In recent weeks Celsius, Voyager and now Vauld, a Singapore-based exchange have all suspended trading on their platforms. There has never been a more important time to ensure people understand the risks of using centralized exchanges.” Saponaro further stressed that centralized finance (cefi) and exchanges are antithetical to the crypto movement. The Divi Labs executive added:
Centralized exchanges and cefi services are not crypto, or even blockchain companies. They are essentially banks with less regulation, oversight, and most importantly, responsibility to the consumers they serve — To take back control, it’s vital that we move to self-custodial products and services that put us in full control of our digital assets and financial futures.
What do you think about Vauld’s announcement on Monday? Let us know what you think about this subject in the comments section below.
Post is imported from RSS feed, by one of our guest editors. G6 does not edit or moderate the content. G6 is not responsible for your actions. No rights owned by G6. To remove the post, please email us at [email protected]