The Singapore-based Vauld lending platform announced to be halting operations and stopping withdrawals until further notice due to financial difficulties so let’s read more today in our cryptocurrency news.
Vauld is a lending platform based in Singapore which halted its operations due to financial difficulties amid volatile market conditions. The company announced it will suspend the deposits, trading, and withdrawals. The company is backed by leading venture capitals like Pantera Capital, Coinbase Ventures, and Valar Ventures. The company will process customer deposits related to the collateralized loan product and the announcement reads:
“Specific arrangements will be made for customer deposits as may be necessary for certain customers to meet margin calls in connection with collateralized loans.”
We have considered that it would be in the best interests of stakeholders to take immediate action in the circumstances.
In furtherance of this, we have engaged the services of our financial and legal advisors in India and Singapore respectively.
— Vauld (@VauldOfficial) July 4, 2022
The company hired advisory firm Kroll PTE Limited and legal companies like Cyril Amarchand Mangaldas and Rajah and Tann Singapore LLP to explore other options and help solve the crisis. Vauld stated that the company faced withdrawals of $107 million since June this year and with the Terra Implosion and Celsius Network financial woes, there were strong enough reasons to be hit with financial difficulties. The revenues crashed and forced the company to lay off 30$ of the staff:
“We’ve taken the painful decision to reduce Vault’s headcount by about 30%.”
The announcement sparked fear among Vauld users as well with some of them tweeting:
Suspend deposits, square off FDs with the principal amount and let users withdraw their funds. You can’t hold investors’ money against their will. I just transferred from BlockFi to Vauld like minutes ago before the announcement. Could I have my BTC back? Seriously.”
Vauld is the latest company to get hit in the latest market meltdown. BlockFi as the New Jersey-based lending company agreed to a revolving line of credit from FTX with plans for acquisitions due to the former’s recent financial troubles, as CEO Zac Prince noted:
“An option to acquire BlockFi at a variable price of up to $240M based on performance triggers.”
Unpopular opinion: careful when using platforms that require VC funding, they often don't have a real business model yet.
(over generalization, there are exceptions of course)https://t.co/lI1pvdPdKr
— CZ 🔶 BNB (@cz_binance) July 4, 2022
Another lending platform Celsius also stopped withdrawals due to liquidity issues. The CEO of Binance Changpeng Zhao lashed out at the companies for relying on VC funds too much without having a clear business model.
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