Vauld Granted Another Creditor Protection Extension in Singapore

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Troubled Singapore-based crypto lender Vauld was granted an additional extension to its creditor protection, affording it more time to present its restructuring plan.

The Singapore High Court has extended Singapore-based cryptocurrency lender Vauld’s creditor protection. Vauld’s existing legal protection lasted until February 28 but has been extended to March 24, 2023.

A spokesperson for Vauld told media outlet CoinDesk:

“The moratorium has been extended till 24-Mar-2023.” Adding, “There will be another hearing scheduled before that to confirm the final decision about approval of the scheme.”

The further extension comes after the firm applied in January to extend its current period of creditor protection. The crypto lending platform initially had until January 20 to present a restructuring plan.

Vauld’s Liquidity Woes

The crypto lending platform halted customer withdrawals in July 2022 after it was hit by an unprecedented liquidity crisis when $200 million left the platform in less than two weeks amid a very turbulent market.

Vauld had to approach a Singapore court to apply for temporary protections from its creditors so that it could work on the business and restructure it to withstand harsh market conditions. Vauld was granted an initial three-month moratorium by the Singapore High Court.

As of July 2022, Vauld owed its creditors a total of $402 million, 90% of which originated from individual retail investor deposits. The lender is backed by Coinbase Ventures, PayPal co-founder Peter Thiel’s Valar Ventures, and CMT Digital.

After Vauld froze customer withdrawals, it appointed advisers to explore restructuring the business. After that, the company received bids from two digital-asset fund managers to manage the tokens stuck on its platform.

Read more:  “When evaluating a fiat-to-crypto on-ramp, three things matter” — Q&A with Uphold

Vauld was also involved in talks with London-based cryptocurrency lender Nexo. Nexo offered to acquire 100% of Vauld to expand its reach into the Asian market.

Bloomberg, however, reported that Vauld decided not to proceed with any deal with Nexo as the firm believes the deal would not be in its creditors’ best interests.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.