Vauld Discloses $70 Million Asset Deficit; Seeks Repayment Moratorium

Vauld has disclosed a shortfall of $70 million to its creditors, days after the crypto platform suspended withdrawals, deposits, and trading activities for its users.

Media reports confirmed the asset-liability mismatch, with the troubled exchange looking for a six-month moratorium on repayments.

The asset-liability mismatch

The company’s CEO and co-founder Darshan Bathija told investors: “On a group level, Vauld has assets worth about $330 million and liabilities worth about $400 million at this time,” adding that parent company Defi Payments has filed for the moratorium.

We intend to apply to the Singapore courts for a moratorium i.e. a suspension of the commencement or continuation of any proceedings against the relevant companies so as to give us breathing space to carry out the proposed restructuring exercise.
— Vauld (@VauldOfficial) July 4, 2022

Bathija also revealed that there is a mismatch in loan tenure because a significant proportion of its assets under management (AUM) is due in the next three to 11 months and cannot be recalled early.

“We have a mismatch of assets and liabilities of Defi Payments where the main contributing factors to the gap have been mark to market losses on BTC, ETH, and MATIC trades and exposure to UST,” he explained.

On the moratorium front, Defi Payments has registered under section 64 of the Insolvency, Restructuring and Dissolution Act, 2018 of the Singapore Courts. “I want to clearly state that this filing does not mean that we are winding up or shutting down the company,” Bathija added. He emphasized the platform’s restructuring strategy in the meantime.

Be[In]Crypto had previously reported that crypto lender Nexo could potentially be in the process of acquiring Vauld. The platform stated that the emphasis is on completing the due diligence process with Nexo while developing a repayment plan for Vauld creditors.

Vauld in hot seat

Earlier this month, Vauld signed an indicative term sheet that provided a 60-day exclusive exploratory period to Nexo to conduct due diligence. The London-based firm plans to acquire up to 100% of the Singapore-based company.

The completion of this transaction is pending due diligence – which both teams are working on as we speak.
Vauld has strived to deliver long term value to all customers, and we believe coming under the @Nexo umbrella will significantly help achieve this.
— Darshan Bathija (@darshanbathija) July 5, 2022

However, if the deal with Nexo does not materialize, Vauld will reportedly consider raising venture capital funding, look for another acquirer, partly wait for a return on deployed capital, convert debt to equity, issue its own token or develop a payment plan tied on the back of future revenue expectations.

Meanwhile, the Singapore-headquartered exchange is dealing with market losses amid the crypto downturn and carries the burden of the algorithmic stablecoin TerraUSD (UST) meltdown.

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Source: https://beincrypto.com/vauld-discloses-70-million-asset-deficit-seeks-repayment-moratorium/