Defi Payments Ltd, the parent company of the troubled crypto lending platform Vauld. Has been granted a short period of reprieve from creditors after being given a three-month moratorium by the Singapore High Court on Monday, August 1. It has been said that the moratorium will provide the company with the necessary breathing room to form an adequate restructuring plan.
Defi Payments had initially requested a six-month moratorium but was reportedly denied by Justice Aedit Abdullah on Monday, citing concerns that an extended period of reprieve “won’t get adequate supervision and monitoring,” per a report by Bloomberg. The approved protection is said to last until November 7, 2022. The judge further highlighted that a further extension period may be possible but will be based on the assessment of the company’s progress in engagement with creditors. As it stands, Vauld owes more than $400 million to its 147,000 creditors – of the total, 90% percent originated from retail investor deposits.
Under the moratorium, Defi Payments would be provided protections from wind-up resolutions, the appointment of a receiver or manager, and any legal proceedings that could be directed toward the company originating from any of its 147,000 creditors.
Vauld has updated its website FAQs and said that the moratorium would provide the breathing room it needs to formulate a restructuring plan for the business to ensure a better outcome for its creditors,
The moratorium is an important procedure to provide the company with the breathing room necessary for it to formulate and consider its options carefully.
Without having been granted the necessary relief, it would be “highly unlikely” that creditors would even receive a fraction of their account’s worth, the company stated further. Vauld halted all customer withdrawals last month for its 800,000 customers, citing unfavourable market conditions and $200 million worth of withdrawals in less than two weeks. The protections of the moratorium will allow Vauld to come up with a restructuring proposal to explore options to revive the business.
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Source: https://cryptodaily.co.uk/2022/08/embattled-crypto-lender-vauld-granted-three-month-protection-against-creditors