Cryptocurrency exchange Vauld has suspended its operations including withdrawals, trading and deposits on its platforms, the company said in a statement on Monday June 4. Vauld said that this has happened primarily due to rising “financial challenges”, despite its best efforts. The suspension has been in force with immediate effect, Vauld said in the corporate announcement on its website.
In the statement available on its website, CEO and co founder Darshan Bathija wrote, “The Vauld management wishes to inform that we are facing financial challenges despite our best efforts. This is due to a combination of circumstances such as the volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate which has led to a significant amount of customer withdrawals in excess of a $197.7 m since 12 June 2022…”
This was the time when the cryptocurrency market faced an unpredictable decline due to the collapse of TerraUSD (UST), which was succeeded by Celsius network pausing withdrawals, and Three Arrows Capital defaulting on their loans.
Bathija said that Vauld is at present with potential investors into the Vauld group of companies. “We intend to apply to the Singapore courts for a moratorium i.e. a suspension of the commencement or continuation of any proceedings against the relevant companies so as to give us breathing space to carry out the proposed restructuring exercise,” read his statement.
“In the meantime, 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,” said Bathija in the statement.
“We seek the understanding of customers of the Vauld platform that we will not be in a position to process any new or further requests or instructions in this regard. Specific arrangements will be made for customer deposits as may be necessary for certain customers to meet margin calls in connection with collateralised loans,” he added.
The Coinbase-backed platform said that it has engaged the services of Kroll Pte Limited as financial advisor, as well as Cyril Amarchand Mangaldas and Rajah & Tann Singapore LLP as legal advisors in India and Singapore respectively to deal with the crisis. “We are confident that, with the advice of our financial and legal advisors, we will be able to reach a solution that will best protect the interests of Vauld’s customers and stakeholders,” it said.
In June, Vauld had announced that it had laid off 30 per cent of its workforce, with most of the employees being from India. The company, which raised $27 million as of July 2021, also said that it had reduced its marketing expenses while also cutting executive compensation by 50 per cent, citing economic slowdown.
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