Key Takeaways:
- Vauld became another victim of the brutal crypto winter as it suspended operations on its platform to safeguard stakeholders' interests.
- The firm follows other crypto companies like Celsius and Voyager.
NEW DELHI (CoinChapter.com) — Cryptocurrency trading and lending platform Vauld has become the latest victim of the crypto market’s ongoing bear run, as it suspended all transactions on its platform.
Vauld’s CEO Darshan Bathijaa said in a blog post that the firm is struggling financially due to a combination of factors, including the volatile market conditions and the financial difficulty of its business partner.
The Singapore-based firm stated it is working with its financial and legal advisors to protect the interests of Vauld stakeholders. Bathijaa shared that Vauld is working with Kroll Pte Limited for financial advice.
Also Read: Investors lambast Bitbns following failure to withdraw funds
In addition, Cyril Amarchand Mangaldas and Rajah & Tann Singapore would be the firm’s legal advisors in India and Singapore, respectively.
We have made the difficult decision to suspend all withdrawals, trading and deposits on the Vauld platform with immediate effect. We believe that this will help to facilitate our exploration of the suitability of potential restructuring options, together with our financial and legal advisors.
Darshan Bathijaa said in the blog post
It seems likely that the bank run was responsible for Vauld’s decision to halt operations. Due to current market conditions, users have withdrawn nearly $198 million from the platform. Additionally, Bathijaa stated that the firm is considering all options, including restructuring, to avoid the fate.
Vauld is also looking into potential investors for its platform. The firm will also apply for a moratorium in the Singapore courts.
The firm has halted transactions for existing customers. However, Bathijaa assured the firm would make “specific arrangements” for collateralized loan customers to meet margin calls.
Not The First Impact Of Crypto Winter On Vauld
On Jun 21, Vauld announced that it would be reducing its workforce by nearly 30%, along with reducing executive compensation by nearly 50%. Bathijaa had assured users that while Three Arrows Capital was a seed investor of Vauld, the firm did not have exposure to 3AC or its insolvency issues.
Furthermore, a Jun 16 email from Vauld had promised users the platform would continue as usual. But, with transactions on hold just 18 days later, it seems Vauld executives have done a U-turn. Terra’s implosion broke a financial Pandora’s box, which saw several firms like 3AC suffer from liquidity issues.
Also Read: Ex Coinbase exec sounds alarmed over more ‘crypto winter’ crashes in coming days.
Firms like Celsius, Voyager, and BlockFi have been forced to take steps after the contagion caught up with them. Voyager blamed Three Arrows Capital for its decision to freeze user funds after 3AC defaulted on a loan of 15,250 BTC and $350 million USDC.
Celsius is also looking into proposals to save the firm from bankruptcy after suffering liquidity problems. However, with the market’s ongoing trend favoring bears, Vauld might not be the last victim of the crypto winter.
