A cryptocurrency exchange and lending platform based in Singapore, Vauld is one of the entities in the crypto market that is facing problems because of the downturn. According to recent reports, the embattled platform has debts that are a whopping $402 million.
Vauld’s creditors
Darshan Bathija, the chief executive of Vauld filed a document on July 8th with Singapore’s High Court and also shared the same on July 18th with the company’s customers. According to the details in the document, 90% of the company’s debt, which is around $363 million, had reportedly been deposited on its platforms by retail individual investors.
The platform owes $34 million to its largest retail creditor. Other debts of the crypto platform include $35 million that it owes to a secured creditor who has not been named. The amount that it owes to 20 of its largest unsecured creditors stands at $125 million.
Crypto exchange FTXTrading Ltd., which was founded by Sam Bankman-Fried, is also one of Vauld’s secured creditors and the platform owes it around $4.1 million.
Seeking protection
According to the documents submitted to the court, the assets of the company include different coins valued at $287.7 million, which include prominent ones like Bitcoin, XRP, and Ethereum. The actual total assets of Vauld have a value of approximately $330 million, as bank balances have not been added to the affidavit submitted to the court.
The company revealed in a separate report that this makes its shortfall to be somewhere around $70 million. Vauld has received banking from some prominent names, including Coinbase Ventures, Pantera Ventures, and Valar Ventures of Peter Thiel.
On July 4th, Vauld announced that it was halting its operations because of financial difficulties that had occurred due to the extreme conditions in the market. Last week, the company also disclosed in a blog post that it had filed for protection against lawsuits and creditors in a Singaporean court. It said that this would provide the company ‘breathing space’ that could help it prepare for the restructuring it intends to do.
Next step
According to experts, a Singaporean moratorium is quite similar to the way Chapter 11 bankruptcy works in the United States. It gives the company room to not have to cease operations completely and not have to liquidate its assets. During this time, it works on coming to a settlement or an agreement with its creditors, restructuring its business, or finding new sources of funding.
Vauld is already in discussions with Nexo, a crypto lending company that had announced earlier this month that it intended to acquire the former. It had just been waiting for a due diligence window of 60 days. The Managing Partner at Nexo, Antoni Trenchev stated that their most important goal, for now, was to verify if an overhaul by the company could help Vauld thrive once more. He said that they wanted to ensure that Vauld could be profitable within their company culture and business model before they decide to acquire it.
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