Vauld halts withdrawals and looks to restructure after users withdraw nearly $200 million

Vauld halts withdrawals and looks to restructure after users withdraw nearly $200 million

Due to the knock-on effects of subdued cryptocurrency prices, Singapore-based lending platform Vauld has suspended withdrawals, trading and deposits on its network.

In one blogging On Monday, CEO Darshan Bathija noted that the company has seen significant customer withdrawals totaling nearly $198 million since June 12.

Vauld faced challenges due to volatile market conditions, financial problems of business partners and the crypto decline, which was exacerbated by the TerraUSD collapse, Celsius freeze and Three Arrows Capital loan defaults, he added.

“Therefore, we are of the view that it would be in the best interest of stakeholders to take immediate action under the circumstances,” Bathija said.

Launched in 2018, Vauld offers users asset-backed lending and borrowing, similar to distressed platforms like Celsius, Voyager and BlockFi.

Vauld's most recent fundraising round took place in July 2021, when it raised $25 million in a Series A round led by Peter Thiel's Valar Ventures. The company also counts Pantera Capital, Coinbase Ventures, Compound Labs CEO Robert Leshner, and others as investors.

Vauld has ominously appointed Asia-Pacific advisory unit Kroll as its financial adviser to explore potential restructuring options, according to the blog. It has also hired Cyril Amarchand Mangaldas in India and Rajah & Tann in Singapore as legal counsel.

The company plans to apply to the Singapore courts for a moratorium - a legal process associated with bankruptcy that follows a company as it works on an agreement with creditors. This is being done to “give us breathing space to carry out the proposed restructuring,” Bathija said.

He added that Vauld's payout freeze would allow the company to examine the viability of restructuring options in consultation with legal and financial advisers.

“Special arrangements will be made for customer deposits, which may be necessary for certain customers to meet margin calls in connection with secured loans,” he said.

Vauld suffers the same fate as rival crypto lenders

Vauld's grim announcement comes about two weeks after the company laid off 30% of its workforce and planned to cut executive pay by 50%.

A growing number of cryptocurrency firms have suspended activity on their platforms since Celsius first did so, leaving users worried about their funds.

Crypto lender Voyager said on Friday it would suspend trading, deposits, withdrawals and loyalty rewards while it looks for “strategic alternatives.” FinBlox imposed a partial payout freeze at the beginning of June. CoinFLEX withdrawals were supposed to last until June 30th, but they not was still recorded.

Sheraz Ahmed, managing partner at STORM Partners, said the near-term outlook for the industry doesn't look too positive. “As we head into summer and the holiday season begins, we may venture deeper into a crypto winter,” he told Blockworks via Telegram.

"In any emerging or even mature industry, there are constant ups and downs. We shouldn't complain during the downs, just as we're told not to have FOMO during the ups."

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The post Vauld Stops Withdrawals, Eyes Restructure After Users Draw Fast $200M is not financial advice.