- The Singapore High Court has extended Vauld’s creditor protection until February 28.
- The lending firm alleged that the negotiations with potential crisis managers entered an ‘’advanced stage.’’
- Vauld turned down its rival company’s deal, Nexo, noting that it would not be in the best interests of its creditors.
The Singapore High court has extended the ailing crypto firm’s creditor protection to February 28. According to the Bloomberg report released Tuesday, the embattled crypto lender has been given more time to work on its restructuring plan.
Vauld, one of the many firms struck by the crypto winter last year, secured a creditor protection extension from Aedit Abdullah, Singapore’s High Court Justice. Initially, the firm had until January 20 to present its revival plan.
However, the platform has received a bid from two digital assets fund managers to take over the crypto company, according to two sources familiar with the matter. However, Vauld has been granted more than a month to wind up its negotiations with the digital asset fund managers to be in charge of the executive control of the tokens stuck in the company.
The Singaporean Court is contented with the firm’s claims that the negotiations have entered the ‘’advanced stage.’’ The defunct lending firm, which owes its creditors over $400 million, had initially requested the court to extend the moratorium to April 2023. However, the request was turned down by the authorities.
Vauld’s rival company, Nexo, tried to obtain an acquisition deal with the platform in the past few months; however, it did not yield positive results. The police raided Nexo’s office in Bulgaria, where the firm reportedly planned to file a lawsuit seeking compensation for the damages caused by the police actions. According to a Bulgarian News Agency, the firm claimed that the authorities did not show any search warrant or identify themselves to Nexo employees.
However, on January 6, Vauld terminated the negotiations between the two companies noting that the deal ‘would not be in the best interests’ of its creditors. The crypto firm pointed out in a statement that:
‘’We have sought a mutual agreement with Nexo to terminate the existing exclusivity arrangement. We continue engaging with shortlisted fund managers to develop a viable strategy that best serves the creditor’s interests.”
The crypto lender suspended withdrawals for its users in July last year, citing the severe market conditions and an unprecedented $200 million in withdrawals in less than two weeks. The firm filed for creditor protection, freezing $46.4 million worth of assets.
Singapore’s High Court readiness on crypto firms
Last August, the company was already granted a three-month moratorium to develop a restructuring plan and provide a better outcome for its creditors. Earlier, the Singapore judge had denied the crypto firm a six-month protection period, noting that a lengthier moratorium would need more supervision and monitoring.
Apart from Vauld, the Singapore High Court has portrayed its readiness to let the defunct crypto platforms find solutions by themselves. According to a Bloomberg report, In August, a Singapore-based crypto platform, Zipmex, was granted a three-month moratorium to obtain answers to its liquidity issues.
Noteworthy, last year pushed many crypto companies to the edge as various firms filed for bankruptcy and others halted withdrawals due to the crypto winter which struck the industry. However, the fate of crypto lending services in Singapore is yet to be known. Singapore’s central bank proposed banning digital payment token service providers from offering any credit facility to users, including fiat and cryptocurrencies. It is yet to be determined whether Vauld will get back on its feet since none of the defunct crypto firms has been able to reimburse its users.
