Singapore-based crypto platform Vauld has suspended all withdrawals, trading and deposits on its platform with immediate effect. The decision comes amid a major downturn across the crypto industry worldwide.
Vauld, backed by the likes of Valar Ventures, which is run by PayPal founder Peter Thiel, says it is facing financial challenges despite its best efforts.
Darshan Bathija, CEO, Vauld, has attributed it to a combination of circumstances such as the "volatile market conditions", the "financial difficulties" of its key business partners inevitably affecting it, and the current "market climate".
This has led to a significant amount of customer withdrawals of over $197.7 million since June 12, 2022, when the decline of the cryptocurrency market was triggered by the collapse of Terraform Lab’s UST stablecoin, Celsius network pausing withdrawals, and Three Arrows Capital defaulting on their loans, he adds.
Vauld has said it would be "in the best interests of stakeholders to take immediate action in the circumstances''. The company has now engaged the services of Kroll Pte Ltd. as its financial advisor as well as Cyril Amarchand Mangaldas and Rajah & Tann Singapore LLP as its legal advisors in India and Singapore, respectively.
The company says its management is working with its financial and legal advisors to analyse all possible options, including potential restructuring options, which would protect the interests of Vauld’s stakeholders.
The Singapore-based Vauld had reduced its workforce by about 30% amid the financial crunch. "We decided to reduce our headcount by about 30%. This is not a decision we take lightly but given the economic slowdown, we concluded that this was the right course of action," Bathija had said in a message to its employees. The reduction impacted every team in the organisation, especially the marketing and talent acquisition teams.
Meanwhile, the Vauld CEO says the company is now currently in discussions with potential investors in 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 to give us breathing space to carry out the proposed restructuring exercise," says Bathija.
"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," the company adds.
The crypto market crash has spooked investors as it wiped out the global market cap worth over $2 trillion. The largest crypto-token, Bitcoin, has fallen by 70% from over $67,000 in November last year to $20,800 levels in June 2022. Similarly, Ethereum, the second-biggest cryptocurrency, has fallen from $4,819 to $1,203. The current global market cap of the cryptocurrency market stands at $940.96 billion.
