On July 4, the crypto-lending company Vauld announced that it was suspending withdrawals, trading and deposits after revealing that the company “faces challenges”. Although it did not mention any specific companies, the Singapore-based cryptocurrency lending platform and the stock exchange mentioned “financial difficulties” stemming from “key business partners.”
Vauld suspends withdrawal due to “financial difficulties”
Over the past 30 days, a number of cryptocurrency lending platforms have revealed that their finances are not very healthy. For example, the crypto lender Celsius stopped “all withdrawals, exchanges and transfers between accounts” on June 12, 2022. Furthermore, on July 1, Voyager announced that the crypto company “temporarily suspended trading, deposits, withdrawals and loyalty rewards. ”
Vauld revealed that it did the same on Monday 4 July, when the company tweeted: “We face challenges despite our best efforts. This is due to a combination of circumstances such as the volatile market conditions, the financial difficulties of our most important business partners that inevitably affect us, and the current market climate, says Vauld’s founder. Darshan Bathija wrote. The Singapore-based crypto startup added:
This has resulted in significant customer withdrawals of over $ 197.7 million since June 12, 2022, when the decline in the cryptocurrency market was triggered by the collapse of Terraform Labs UST stablecoin, Celsius Network stopping withdrawals and 3AC defaulting on loans.
Vauld went on to point out that the startup is currently working with financial and legal advisers in India and Singapore. The company also mentioned that the company is talking about restructuring options with the advisors and the methods that “best protect the interests of Vauld’s stakeholders.” Vauld intends to apply to the courts in Singapore to protect the company from any lawsuit and to request time so that Vauld can have “respite to carry out the proposed restructuring exercise”. Vauld’s Twitter announcement continued:
In the meantime, we have made the difficult decision to suspend all withdrawals, trade and deposits on the Vauld platform [effective immediately].
Bathija says the company believes the suspension will help Vauld explore potential restructuring options. While Vauld mentioned that a huge number of withdrawals took place on June 12, the same day that Celsius stopped operations, Blockfi’s co-founder Zac Prince noted that his company witnessed a significant “increase in client withdrawals” that day as well.
After Vauld’s announcement, customers were not satisfied with the operations freezing. “Please confirm if user resources are safe or not?” an individual black to Vauld’s Twitter thread. ‘I thought Vauld had $ 100 [million] insurance, “another person asked. “That [insurance] protected from hacks, not bankruptcy, “a random person so answer the insurance question.
Vauld is supported by well-known companies such as Pantera Capital, Valar Ventures and Coinbase Ventures. The company also reduced employees by 30% on June 21 due to “uncertain” market conditions, according to a announcement from the startup’s founder, Bathija. To date, cryptocurrency lender Vauld has raised $ 27.5 million from investors.
Nick Saponaro, founder and CEO of the crypto payment platform Divi Labs, commented on the Vauld situation in a note sent to Bitcoin.com News. “In recent weeks, Celsius, Voyager and now Vauld, a Singapore-based exchange, have all suspended trading on their platforms. There has never been a more important time to ensure that people understand the risks of using centralized exchanges.” Saponaro further stressed that centralized finance (cefi) and stock exchanges are antithetical to the crypto movement.
Centralized exchanges and cefi services are not crypto or blockchain companies. They are mainly banks with less regulation, supervision, and most importantly, responsibility to the consumers they serve – To regain control, it is important that we move to self-managing products and services that give us full control over our digital assets and financial futures.
Tags in this story
30% redundancies, 3AC, Bankruptcy, bankruptcy proceedings, Blockfis co-founder, Celsius, Coinbase Ventures, deposits, Divi Labs, financial advisers, Increased withdrawals, Insolvency, important business partners, legal advisers, market climate, Nick Saponaro, Non Custodial, non-custodial solutions , Pantera Capital, restructuring, restructuring options, Singapore courts, Three Arrows Capital (3AC), trading, Valar Ventures, Vauld platform, Vauld’s Twitter account, voyager, Withdrawals, zac prince
What do you think of Vauld’s announcement on Monday? Tell us what you think about this topic in the comments section below.
Jamie Redman
Jamie Redman is a news editor at Bitcoin.com News and a financial engineering journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols that are emerging today.
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