Lender Vauld seeks protection from creditors
Cryptocurrency Lenders Vald groupwhich is backed by Peter Thiels Valar Ventures and Coinbase Global, has filed for protection following the halt to payouts.
The application for a deferral decision submitted on July 8 is intended to give the company “the necessary freedom to prepare for the intended restructuring for the benefit of all parties involved,” the company said in a blog entry on July 11th.
According to a Wall Street journal, Vauld suspended withdrawals, trading and deposits on its platform on July 4th report. It is another in a line of crypto firms to take this action due to mass volatility and months of instability in the crypto market.
The lender said “financial difficulties of key business partners” also factored into its decision.
Its customers had withdrawn around $200 million in crypto from the platform since June 12. Vauld also laid off about 30% of its employees, slowed hiring and halved executive pay beginning in June.
The Singapore moratorium is like a Chapter 11 bankruptcy under US bankruptcy laws. It will help the company avoid going out of business and liquidating assets.
Yuankai Lin, a partner at RPC Premier Law in Singapore, said the company will use this to buy time to reach an agreement or settlement, or to seek new financing or to restructure its business.
Founded in 2018, Vauld was in talks with Nexo, a crypto lender that had agreed in principle to shut down the company after a 60-day due diligence window.
See also: Crypto lender Celsius files for Chapter 11 bankruptcy
Many companies, including Celsius Network, Voyager Digital and others, have recently frozen withdrawals, citing the economic climate. PYMNTS wrote about Celsius’s Chapter 11 bankruptcy filing in early July, a month after it froze people’s accounts.
The company’s troubles came as it offered large yields to crypto depositors after making large loans backed by insufficient collateral.
For all PYMNTS crypto coverage, subscribe to the daily newspaper Crypto Newsletter.