Crypto lender Vauld files for protection from creditors as Nexo waits in the wings

Vauld, the crypto lender backed by Peter Thiel, has filed for protection from creditors based in Singapore. The move comes after the company suspended all customer withdrawals from its platform. Nexo is in talks with Vauld about a possible buy-out.

There are now several platforms like Vauld that are in a perilous position. However, Vauld has not filed for Chapter 11 bankruptcy like some. Instead it is just seeking temporary protection from its creditors so that it can gain the time to work on the business and put it in a better shape to withstand the drawdowns that are happening across markets. The company recently announced in a corporate statement in its blog:

“The management has decided that, in light of the current circumstances, it would be in the best interests of all stakeholders (including creditors) to file the Application for a moratorium order in favour of Defi Payments. This is so as to give Defi Payments and the Vauld management the breathing space it requires to prepare for the intended restructuring for the benefit of all stakeholders.”

So far, the impact for Vauld has been that nearly $200 million was withdrawn from the platform prior to the withdrawal suspension around two weeks ago. In addition, the crypto lender cut its workforce by 30% in order to help it manage its costs.

Meanwhile, Vauld has stated that it continues to have discussions with London-based crypto lender Nexo, which has offered to acquire 100% of Vauld so that it can increase its footprint in Asian markets.

“At this time, the Vauld Group continues to have discussions with Nexo Inc whilst Nexo Inc carries out is due diligence, and also explore potential restructuring options that would best protect the interests of the Vauld Group’s stakeholders.”

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.