Vauld Crypto Company Filed For Protection Against Creditors

The Vauld crypto company filed for protection against creditors after the disruption of the platform and the dismissal of the staff so let’s read more today in our cryptocurrency latest news.

One of the worst affected companies by the current macroeconomic factors was definitely Vauld and its field for protection against creditors in Singapore. The process should grant the entity a breathing space and needs to reconstruct the distressed operations. It’s safe to say that the crypto winter harmed plenty of organizations in the field like the Singaporean exchange Vauld. Last month, the company suspended withdrawals, deposits, and trading but shortly after it dismissed about 30% of the staff and cited economic slowdowns and prolonged market downturn.

We've strived to be an excellent crypto lending platform. This has been our goal from day one. We’re committed to finding the best resolution for our customers.

A message from @darshanbathija 🧵

— Vauld (@VauldOfficial) July 4, 2022

According to the reports by WSJ, the Vauld crypto company will try to ease the turbulence by filign for protection against its creditors and the process will be similar to filing for Chapter 11 bankruptcy in the USA. The debtor will remain in charge of the operations and will get more time to resolve the financial problems so the moratorium will give the company the needed breathing space after the adverse events:

“The management has decided that, in light of the current circumstances, it would be in the best interests of all stakeholders (including creditors) to file the Application for a moratorium order … This is so as to give Defi Payments [its Singapore entity] and the Vauld management the breathing space it requires to prepare for the intended restructuring for the benefit of all stakeholders.”

It’s worth mentioning that Singapore is home to another crypto company that experienced similar issues – Three Arrows Capital. Its problems were prompted by the crash of the Terra UST stablecoin and the LUNA stablecoin as well as the crash in the value of most digital currencies. The crypto hedge fund failed to meet the margin calls but a few days later, the court in the British Virgin Islands ordered it into liquidation. This was considered a huge hit for the industry since some of the biggest 3AC creditors include Voyager digital and Blockchain.com.

We have considered that it would be in the best interests of stakeholders to take immediate action in the circumstances.

In furtherance of this, we have engaged the services of our financial and legal advisors in India and Singapore respectively.

— Vauld (@VauldOfficial) July 4, 2022

As the reports show, the crypto lender Nexo was monitoring Vauld’s issues and could soon purchase it. The two parties signed a 60-day exclusive period that is focused on the deal and if successful, the agreement will see Nexo owning up to 100% of the Singaporean company. The CEO Darshan Bathija noted that the acquisition could bring more protection for investors and ease some of the problems in the company:

“Operating under the Nexo umbrella puts us instantly in a position of strength to continue the execution of our fiduciary obligations to our customers and at the same time to execute upon both companies’ ambitious roadmaps, regardless of the market conditions.”