- Vauld has received an extension from the Singapore court for its creditor protection period.
- The extension is until March 24.
- Vauld has received bids from two digital asset fund managers after talks with Nexo broke down.
A court in Singapore has granted Vauld, a Singapore-based cryptocurrency lender, another extension to present its restructuring plan, protecting it from its creditors until March 24.
The cryptocurrency lender stopped accepting deposits, withdrawals, and trading on its platform last July. As a result, it applied for Singaporean creditor protection and was given until January 20 to develop a reorganization plan.
Vauld has received bids from two digital-asset fund managers to take over the administration of the tokens locked on its platform. This is according to the source with close knowledge of the matter, who requested to remain anonymous.
Nexo, a fellow cryptocurrency lender, has been the front-runner to acquire Vauld for a while now. Vauld asserted that the sale would not be in the best interests of its creditors, and as a result, these negotiations appear to have broken down.
Vauld owes debtors $402 million as of July 8 of last year, 90% of which came from deposits made by individual retail investors, a July 8 affidavit filed by Vauld co-founder and CEO Darshan Bathija revealed. Once it requested creditor protection, Indian authorities froze its assets worth 3.7 billion rupees ($46.4 million).
How Did Vauld Get Here?
In June of last year, Celsius, a cryptocurrency lending platform, declared that all withdrawals would be stopped to “stabilize” liquidity and deal with the volatile market. A significant sell-off across the sector caused a 70% drop in the price of the Celsius network’s native token in just one hour and the market value of all cryptocurrencies to go below $1 trillion.
Vauld filed for protection against its assets on July 21 due to the direct impact this had on its business operations. As plans for Nexo to save the company were being discussed, the Singaporean court gave the company three months of protection from creditors.
Vauld’s parent company, Defi Payments Ltd, announced it would pursue a moratorium. The company stated that:
“This is to give Defi Payments and the Vauld management the breathing space it requires to prepare for the intended restructuring for the benefit of all stakeholders.”
The decision to grant this extension was made “based on an evaluation of the firm’s progress in engaging with its creditors.”
As of August 1, Vauld’s stablecoin-dominated liabilities exceeded similarly categorized assets under management by $121 million, resulting in a net deficit of $81 million.
A spokesperson from the lending firm stated that the restructuring could not be completed within the timeframe given because:
“The restructuring timeline is anticipated to be at least a further four months, and so Defi Payments will apply to the Court for an extension of the moratorium for continued protection concerning legal claims against Defi Payments.”
This request was made to meet the regulatory deadlines required by law and provide creditors enough time to review the document and prepare for the voting process. Except for one, almost all creditors supported extending the moratorium.
Remember that the committee was merely a consultation body that represented the general creditors throughout the restructuring process; it didn’t have the authority to make decisions.
