Vauld gets three-month moratorium extension to continue exploring options

Embattled Asian crypto lender Vauld, which abruptly halted client withdrawals last month and sought protection from creditors, has received three months to continue exploring its options, two sources with direct knowledge of the matter told The Block.

The Singapore High Court granted Vauld a moratorium extension until November 7 at a hearing today, the sources said. The court has also asked Vauld to form a creditors committee, they added.

Vauld had been seeking a six-month extension under a moratorium application filed on July 8. The three-month extension means disgruntled creditors of Vauld cannot commence or continue any legal proceedings against the company while it explores its restructuring options. Client funds remain stuck until Vauld reaches a restructuring deal, including its potential acquisition by rival Nexo.

Vauld did not respond to The Block’s request for comment by press time.

Vauld woes 

Vauld halted client withdrawals on July 4 after facing financial difficulties caused by TerraUSD’s (UST’s) implosion and the broader crypto market downturn. The firm, based in Singapore with most of its team in India, owes a total of $402 million to its creditors. Of that sum, $363 million — or 90% — comes from individual retail investors’ deposits.

The moratorium extension had support from many of Vauld’s creditors. As The Block reported last week, from the total of around 147,000 creditors, 2,910 responded to its moratorium application, with 2,280 (approximately 78%) indicating that they are in support of the extension.

London-based Nexo is currently exclusively conducting due diligence on Vauld. It started the process on July 5 and has until September 5 to reach a decision on whether to bail out Vauld.

If Nexo decides to not make a deal with Vauld, the latter could take other paths it has previously highlighted. These include raising more venture capital, converting debt to equity, issuing its own token and developing a payment plan tied to future revenue.

© 2022 The Block Crypto, Inc. All Rights Reserved. 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.