Vauld Looks for Security Against Cryptocurrency Creditors

Vauld, a Singapore crypto exchange, has filed for protection from its lenders in Singapore. Besides, the plea to get a moratorium will give the lender some time to reorganize its schemes and plans. The firm has been experiencing difficulties with operations since the month began due to falling asset value. The filing of the moratorium was placed just a few days after the firm suspended withdrawals.

Since the market conditions are currently fluctuating, any sort of trading, deposits, and withdrawals was all temporarily halted on July 4 by Vauld. With the temporary ceasing, the three-week stressful activities came to a halt during which users remove roughly $198M  from the network.

Furthermore, at the same time, Vault was going through a run on its assets. CEO Darshan Bathija stated that his company would cut off thirty percent of its workforce.

Let’s know more about the issue in detail. Stay with us if you are interested as well.

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The recent blog post

The corporation submitted an on July 8 to state a recent post on the blog. 

“The management has concluded that, given the prevailing conditions, it would be in the most significant advantage of all investors (including lenders) to file the request for a moratorium order.”

Vault needs some time to restructure itself

Vauld Crypto Exchange
Image Credit: Business Today

From this decision, Defi Payments and the management of Vauld will get some time. The firm is setting itself up for reorganization, which will be in the interest of all stakeholders.

According to Vauld, it is continuing to engage with Nexo. Nexo signed a memorandum of understanding with them earlier in July. However, they are conducting 60-day due diligence to establish if they are closing the deal. Vauld claims that the due diligence period will begin after the 60th day.

An affidavit was given on July 8 by Vauld co-founder and CEO Darshan Bathija. It said that the crypto lender owes $402 million to its creditors. Among the investors in the crypto lender are Peter Thiel, Pantera Capital, and Coinbase Ventures.

Voyager was the first to face this situation

The failure of the Terra network in May showed the actors in the cryptocurrency business. As a result of which led to the bankruptcy of Voyager Digital, Celsius Network, and Three Arrows Capital. Besides, due to a lack of available liquidity, some exchanges have temporarily ceased their trading activities.

Voyager felt the effects of the Three Arrow Capital liquidation almost immediately. At the end of June 2022, the business started the marketing process. It would either raise funds or liquidate all its assets. On June 23, 2022, the firm reduced the maximum amount customers could withdraw from $25,000 to $10,000. In addition, the corporation immediately halted all trading as well as deposits and withdrawals.

Just a few days before Voyager filed for bankruptcy, it had signed a $500 million revolving fund with Alameda Ventures Ltd. This had $200 million in cash and 15,000 Bitcoins. Voyager announced publicly that it would initiate a “dual-track” restructuring process. 

Voyager hopes that it will be able to take up the plan of reorganization using Voyager Tokens, coins, and cash. Besides, it is also relying on the Three Arrows Capital Recovery. However, this plan at this stage is just a synopsis of the standard options open to any firm that has filed for bankruptcy.

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