Crypto Lender Vauld will be the last market damage to suspend withdrawals
Key insights:
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Vault is seeking legal counsel for restructuring plans.
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CoinLoan also has limited withdrawals.
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Celsius has started repaying debt to the DeFi platform Maker.
On July 4, Vauld, which is also supported by Coinbase, suspended withdrawals, trades and deposits on its platform. The company cited unstable market conditions and financial difficulties that the business partners are facing.
The cryptocurrency market crash, and several other high-profile services that suspend services, have intimidated investors who have withdrawn just under $ 200 million from Vauld since June 12.
The Singapore-based company issued a statement on Monday warning customers that they have sought legal advice to “explore and analyze all possible options, including potential restructuring options.”
Seek legal advice
Last month, Vauld stated that it would lay off 30% of its employees, and put the anchors on employment and halve the management compensation.
According to the company’s CEO Darshan Bathija, Vauld Group is currently in discussions with potential investors. It will apply to the courts in Singapore for a moratorium to give it respite for restructuring.
“We believe this will help facilitate our exploration of the suitability of potential restructuring options, together with our financial and legal advisors,” he added.
Launched in 2018 and offering trading in digital assets, custody and cryptocurrency, Vauld raised $ 25 million in a Series A financing round in 2021. Investors including Peter Thiel founded Valar Ventures, Pantera Capital and Coinbase Ventures.
The suspension of services follows those such as Voyager Digital, which did the same last week, accusing Three Arrows Capital of defaulting on its loans.
The large cryptocurrency lender Celsius suspended cryptocurrency withdrawals in June and has brought in advisers to prepare for restructuring.
The CoinLoan platform also has limited services and withdrawals in response to market turmoil. On July 4, the company stated that an increase in withdrawals led it to impose a withdrawal limit of $ 5,000 per day.
Celsius debt repayment
In a related development, the controversial Celsius Network (CEL) has repaid $ 120 million of its debt to decentralized stackcoin and lending maker Maker.
The company borrowed hundreds of millions from Maker using wrapped Bitcoin (WBTC) as collateral. Maker allows the minting of a dollar-denominated stablecoin called DAI when cryptocurrencies are pledged as collateral.
The repayment has made it possible for Celsius to reduce the risk of its loan position from potential liquidation.
Since July 1, Celsius has repaid around $ 143 million in DAI stack coins over four separate transactions. DefiExplore, which describes the firm’s debt position security (CDP), is currently reporting a $ 4,967 liquidation price. Celsius still owes DAI $ 82 million.
Decentralized financial protocols automatically liquidate positions to sell the collateral if the debt is unpaid.
This article was originally posted on FX Empire
