Here’s why crypto exchange Vauld has suspended deposit, withdrawal services
Crypto exchange Vauld has suspended deposits and withdrawals on its platforms citing “financial challenges” in the volatile crypto market conditions. Founded in 2018 by Bathija and Sanju Kurian, Vauld provides a suite of products for crypto investors. This includes fixed deposits and asset-backed lending and borrowing platforms. We take a look at why Vauld stopped its operations (withdrawals and deposits).
Vauld’s management in a blog post said she faced financial challenges despite her best efforts. The crypto firm said the current market climate led to a significant number of customer withdrawals when the decline in the cryptocurrency market was triggered by the collapse of Terraform Lab. Terra-Luna stablecoin, Celsius network suspending withdrawals, and Three Arrows Capital in default on their loans.
The three-year-old company, which has raised around $27 million from investors including Pantera Capital, Coinbase Ventures and Peter Thiel-backed Valar Ventures, said the market crash has forced clients to withdraw around $198 million. million since June 12.
Vauld is currently in discussions with potential investors. The company intends to apply to the Singapore courts for a moratorium, i.e. a stay of the initiation or continuation of any proceedings against the affected companies, in order to give the company breathing space to carry out complete the proposed restructuring exercise.
“We believe this will facilitate our exploration of the suitability of potential restructuring options, together with our financial and legal advisors. We seek to impress upon Vauld Platform clients that we will not be able to process any requests or new or additional instruction in this regard. Specific provisions will be made for customer deposits that may be required for certain customers to meet margin calls related to secured lending,” the company said.
Early last month, Vauld appeared to be struggling for some time as he announced he would be cutting his workforce by 30 per cent in June. The company also said in the statement that it was cutting marketing spending, reducing hiring efforts and cutting executive salaries by 50%. The company cited the economic downturn as the reason for this.