The crypto market continues to face turmoil with yet another company in the sector paralyzing its activities and stopping customer withdrawals due to financial problems.
This time, the company pausing withdrawals is Vauld, a Singapore-based digital asset trading and lending platform.
According to a company blog post signed by CEO Darshan Bathija, Vauld “has made the difficult decision to suspend all withdrawals, trading and deposits on the platform with immediate effect.”
As Bathija explained, Vauld is struggling due to a number of issues in the industry at large. This includes, for example, the volatile crypto market and the financial difficulties of business partners.
Vauld suffers mass looting
As of June 12, Vauld customers have withdrawn nearly $198 million. These mass withdrawals were caused by three factors: the implosion of the stablecoin Terra USD (UST); Celsius’ decision to pause customer withdrawals; and the problems of Three Arrows Capital (3AC), which defaulted on its loans, Bathija said.
In an attempt to restructure itself, Vauld said it hired Kroll as its financial adviser. In addition, he has partnered with Cyril Amarchand Mangaldas and Rajah & Tann Singapore LLP as his legal advisors in India and Singapore.
“Our management remains fully committed to working with our financial and legal advisors to the best of our ability to explore and review all possible options, including possible restructuring options, that would best protect the interests of Vauld’s stakeholders,” said the CEO.
Vauld aims at restructuring
Also according to the CEO, the company is in dialogue with potential investors. At the same time, Vauld intends to ask the Singapore courts for a moratorium. That is, a suspension of the initiation or continuation of any proceedings against the relevant companies.
This eventual suspension will give Vauld time to complete the restructuring in question.
“We are confident that, with the advice of our financial and legal advisors, we will be able to arrive at a solution that will best protect the interests of Vauld’s customers and stakeholders.”
On the pause in looting, Bathija said this measure will help facilitate “exploration of the adequacy of possible restructuring options”.
He also said that Vauld will enter into some one-off agreements for deposits from customers so they can meet margin calls.
Vauld is backed by high profile companies including Peter Thiel’s Valar Ventures, Coinbase Ventures and Pantera Capital.