Crypto trading and lending platform Vauld has suspended customer withdrawals as a result of the current volatility in the cryptocurrency market as of Monday.
The CEO of Vauld Crypto Exchange, Darshan Bathija, stated in a blog post that this is caused by various factors, including unstable market conditions.
The drop in the crypto market was sparked by the fall of Terraform Lab’s UST Stablecoin, Celsius network pausing withdrawals, and Three Arrows Capital defaulting on their loans on June 12, 2022.
Bathija added that the financial struggles of their critical business collaborators are inevitably impacting the troubled crypto lender. In addition, he cited the existing market trends, which have resulted in a significant amount of customer withdrawals in excess of $197.7 M since June 12.
Vauld restructuring strategy amidst crypto market climate
According to the blog, Vauld has menacingly selected Kroll, the Asia Pacific consulting division as its financial advisor to investigate possible reorganization possibilities. Additionally, it has retained the legal counsel of Rajah & Tann in Singapore and Cyril Amarchand Mangaldas in India.
The Company intends to ask the Singapore courts for a moratorium, which is a legal action related to insolvency that a Corporation can take while negotiating with creditors. According to Bathija, this will be accomplished to allow the Company a breathing space to carry out the suggested reorganization exercise.
The CEO also added that the company will be able to investigate the viability of restructuring options thanks to Vauld’s withdrawal freeze after consulting with legal and financial advisors.
About two weeks ago, Vauld made a dire warning after announcing plans to reduce CEO remuneration by 50%. The company additionally laid off 30% of its workforce.
An increasing number of companies have stopped allowing activity on their platforms, making customers concerned about their money. Celsius was the first bitcoin company to halt its withdrawals.
Vauld is backed by prominent investors like Peter Thiel’s Valar Ventures, Coinbase Ventures, and Pantera Capital. The business has received $27.5 million in investments to date. Bathija claims that Vauld is actively discussing with prospective investors.
Vauld was launched in 2018 and provides users with asset-backed borrowing and lending, much like troubled platforms like Celsius, Voyager, and BlockFi. It also runs a cryptocurrency exchange that enables trading.