Crypto Lender Vauld Suspends Withdrawals: Here's Why

Vauld, a Singapore-based crypto trading and lending platform with most of its team in India, has become the latest crypto firm to halt customer withdrawals amid the unforgiving market din. CEO Darshan Bathija said in a blog post on Monday that the firm has "made the difficult decision to suspend all withdrawals, trading and deposits on the Vauld platform with immediate effect." Vauld is struggling financially due to a combination of factors, including a volatile market and the financial difficulties of business partners, according to Bathija.

Since 12 June, the platform has seen customer withdrawals of nearly $198 million (roughly Rs. 1,562 crore), triggered by the implosion of the TerraUSD stablecoin, Celsius's decision to halt withdrawals and Three Arrows Capital's woes, said Bathija.

Vauld is open to potential restructuring options. To that end, the firm has hired Kroll as its financial advisor and Cyril Amarchand Mangaldas and Rajah & Tann Singapore LLP as its legal advisors in India and Singapore, respectively.

"Our management remains fully committed to working with our financial and legal advisors to the best of our abilities to explore and analyse all possible options, including potential restructuring options, that would best protect the interests of Vauld's stakeholders," said Bathija.

Vauld is currently also in discussions with potential investors, according to Bathija.

"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," he added.

Vauld is backed by a host of high-profile investors, including Peter Thiel's Valar Ventures, Coinbase Ventures and Pantera Capital. The firm has raised $27.5 million (roughly Rs. 217 crore) in total funding to date.

As highlighted in a Bloomberg report, Vauld's move arrives less than three weeks after the company said it "continues to operate as usual" and that it had "maintained a balanced and conservative approach to liquidity management." Shortly after that attempt to reassure customers, Vauld announced plans to cut 30 percent of its headcount.

Vauld's troubles echo those of crypto lenders Celsius Network and Babel Finance, which were forced to freeze withdrawals to conserve strained liquidity as markets tumbled.