Cryptocurrency Lender Vauld Suspends Withdrawals as the Crypto Market is Crashing

On Monday, crypto lender Vauld halted all withdrawals, trading, and deposits on its platform and stated it is evaluating alternative restructuring options as the crypto market is crashing.

 

KEY POINTS

• on  Monday, crypto lender Vauld halted all withdrawals, trading, and deposits on its platform and stated it is evaluating alternative restructuring options.
• Since June 12, consumers have withdrawn more than $197.7 million from the Vauld platform owing to “volatile market conditions,” according to a statement from Vauld.
• Vauld is the most recent cryptocurrency to fall victim to this year’s price decline, which has highlighted faults in a number of digital coin projects and business plans.

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Financial Challenges

Vauld CEO Darshan Bathija stated in a blog post on Monday that the company is experiencing “financial challenges” as a result of “volatile market conditions, the financial difficulties of our key business partners, and the current market climate,” which has resulted in customers withdrawing more than $197.7 million from the platform since June 12.

The Singapore-based firm stated that it is collaborating with its financial and legal experts to “explore and analyze all conceivable options, including prospective restructuring options, that would best safeguard Vauld’s stakeholders’ interests.”

The decision to suspend withdrawals by Vauld comes less than three weeks after CEO Bathija stated that the company “continues to operate normally despite uncertain market conditions.” In a blog post published on June 16, Bathija stated that withdrawals were being processed normally and will continue to be so in the future.

But Vauld is the most recent cryptocurrency to fall victim to the price decline this year. The second quarter was the lowest quarterly result for Bitcoin since 2011. During the three-month period, the value of the cryptocurrency market decreased by billions of dollars.

Several bitcoin initiatives and business strategies have had their weaknesses exposed by the market fall. In May, the algorithmic stablecoin terraUSD fell, bringing its sibling currency luna down with it. In the meantime, the prominent cryptocurrency hedge firm Three Arrows Capital went bankrupt after defaulting on a $660 million debt from Voyager Digital.

Such as Vauld, crypto lending companies have encountered liquidity concerns. Celsius suspended customer withdrawals last month, claiming “severe market conditions.”

Vauld stated that the company is “in conversation with possible investors.”

The company said that it has recruited Kroll Pte Limited as its financial advisor and Cyril Amarchand Mangaldas and Rajah & Tann Singapore LLP as its legal counsel in India and Singapore, respectively.