Vauld, Singapore’s crypto lender, owes retail investors US$363M -

Crypto lending platform Vauld owes creditors US$402
90% of the debt is owed to individual investors

Vauld, a Singapore based crypto lending platform owes creditors US$402 million. On July 8, the co-founder and CEO of vauld, Darshan Bathija, filed a document to Singapore’s High Court which states that about 90% which is $363 million of the debt is owed to individual investors.

Vauld also owes a sum of $125 million to its 20 unsecured creditors. 19 of them seem individual but one of them is an unnamed party. One party owes $34 million whereas three parties owe nearly $10 million each.

In case of bankruptcy, unsecured creditors would not be prioritised. The priority would be given to secured and preferential creditors.

Talking about the secured creditors, FTX Trading Ltd. and an unnamed party owe $4.1 million and $35 million respectively. The crypto exchange giant, FTX, is not ready to comment on this matter.

On July 4, Vauld freezed the client withdrawals as the company was preventing the bankruptcy. After the news, Nexo, a London based crypto platform, tried to acquire Valud by signing a sheet which permitted a 60 day period to control due tenacity.

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Company’s cause of financial problems

In the document that was filed by the company’s CEO he summarised the cause of its financial problems.

The very first reason was, the company held about $28million in TerraUSD but the collapse of UST led to the position of its net assets to fall terribly. After that, the crypto market’s downtrend followed UST’s damage which led to the supplemental losses for the company.

The third reason was that many debtors backed out their loans due to the market downtrend.

“Many debtors who took loans from the Vauld platform without providing any assurance backed out their loans.”

Last but not the least reason was the company made many investments in sponsorship agreements with Alfa Romeo and Crystal Palace Football Club for about $6 million. The agreements were signed in September 2021 and March 2022.

Company’s approach to the Court

To figure out the matter and get some space, the company has applied for a stay to the Singapore High Court. The company demanded a hold on any legal action taken by the government in between the firm searching out any reorganisation options.

As per the law of Singapore, an automatic stay of 30 days rises after filling the application. The hearing is scheduled for August 1 and the company wants an extension for 6 months. But, whether the hold is sanctioned or not will be only determined on the hearing day.

Conclusion

Eventually, the company is looking for the support of creditors as it is a strong point of determining the sanctioning of extension to the company.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing