Singapore-headquartered Vauld, a crypto lending and exchange startup, suspended withdrawals, trading and deposits on its platforms on Monday with immediate effect.
In a public letter, Vauld’s CEO, Darshan Bathija admitted that the company is “facing financial challenges.” He blamed the ongoing market volatility and the financial difficulties of the crypto startup’s key business partners.
Further, Vauld customers have withdrawn $197.7 million in cryptocurrencies from the platform since June 12, 2022, which is also causing distress to the platform’s business. The withdrawal rush was triggered by the collapse of the UST stablecoin, the pausing of withdrawals by Celsius, and the liquidation of crypto hedge fund Three Arrows Capital (3AC).The Collapse of Another Crypto Lending Platform?
“We are currently in discussions with potential investors into the Vauld group of companies,” Bathija noted. “We intend to apply to the Singapore courts for a moratorium i.e. a suspension of the commencement or continuation of any proceedings against the relevant companies so as to give us breathing space to carry out the proposed restructuring exercise.”
The suspension of services is believed to help the company in facilitating “exploration of the suitability of potential restructuring options.”
Vauld, founded in 2018, is another crypto startup that garnered popularity with the rally in cryptocurrency prices. The platform claimed to offer the highest interest rates on major cryptocurrency deposits. It offered borrowing against cryptocurrencies and also several other trading-related services.
“We seek the understanding of 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 as may be necessary for certain customers to meet margin calls in connection with collateralised loans,” Bathija wrote.
Meanwhile, Binance CEO, Changping Zhao took a dig at the situation, questioning the business model of venture capital-funded startups. Some of the prominent backers of Vauld are Peter Thiel-backed Valar Ventures, Coinbase Ventures and Pantera Capital.
This article was written by Arnab Shome at www.financemagnates.com.